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of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K  (Mark One)☒Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the fiscal year ended January 31, 2024 OR☐Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the transition period from             to           .Commission File Number: 001-32224 Salesforce, Inc.(Exact name of Registrant as specified in its charter) Delaware94-3320693(State or other jurisdiction ofincorporation or organization)(IRS EmployerIdentification No.)Salesforce Tower415 Mission Street, 3rd FlSan Francisco, California 94105(Address of principal executive offices)Telephone Number: (415) 901-7000(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock, par value $0.001 per shareCRMNew York Stock ExchangeSecurities registered pursuant to section 12(g) of the Act:Not applicableIndicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☒    No  ¨Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    Yes  ¨    No  ☒Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:    Yes  ☒    No  ¨Indicate by check mark whether the Registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).    Yes  ☒    No  ¨Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”  Table of Contents“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.Large accelerated filer☒Accelerated filer  ☐Non-accelerated filer☐Smaller reporting company☐Emerging growth company☐If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ¨Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report  ☒If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ¨Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒Based on the closing price of the Registrant’s Common Stock on the last business day of the Registrant’s most recently completed second fiscal quarter, which was July 31, 2023, the aggregate market value of its shares (based on a closing price of $225.01 per share) held by non-affiliates was approximately $194.1 billion. Shares of the Registrant’s Common Stock held by each executive officer and director and by each entity or person that owned 5 percent or more of the Registrant’s outstanding Common Stock were excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.As of February 29, 2024, there were approximately 970 million shares of the Registrant’s Common Stock outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the Registrant’s definitive proxy statement for its 2024 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed within 120 days of the Registrant’s fiscal year ended January 31, 2024, are incorporated by reference in Part III of this Report on Form 10-K. Except with respect to information specifically incorporated by reference in this Form 10-K, the Proxy Statement is not deemed to be filed as part of this Form 10-K.Table of ContentsINDEX  Page No. PART I Item 1.Business5Item 1A.Risk Factors11Item 1B.Unresolved Staff Comments35Item 1C.Cybersecurity35Item 2.Properties37Item 3.Legal Proceedings 37Item 4.Mine Safety Disclosures37Item 4A.Information About Our Executive Officers37PART IIItem 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities39Item 6. Reserved41Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations42Item 7A.Quantitative and Qualitative Disclosures about Market Risk54Item 8.Financial Statements57Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure92Item 9A.Controls and Procedures92Item 9B.Other Information93Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections93PART IIIItem 10.Directors, Executive Officers and Corporate Governance94Item 11.Executive Compensation94Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters94Item 13.Certain Relationships and Related Transactions and Director Independence94Item 14.Principal Accountant Fees and Services94PART IVItem 15.Exhibits and Financial Statement Schedules95Item 16.10-K Summary95Index to Exhibits95Signatures982Table of ContentsFORWARD-LOOKING INFORMATIONThis Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Words such as “expects,” “anticipates,” “aims,” “projects,” “intends,” “plans,” “believes,” “estimates,” “seeks,” “assumes,” “may,” “should,” “could,” “would,” “foresees,” “forecasts,” “predicts,” “targets” and “commitments” and variations of such words and similar expressions are intended to identify such forward-looking statements, which may consist of, among other things, trend analyses and statements regarding future events, future financial performance, anticipated growth, industry prospects, our business plans and growth strategy, our strategies, expectations or plans regarding our investments, including strategic investments or future acquisitions, our beliefs or expectations regarding our competition, our intentions regarding use of future earnings, our expectations regarding attrition rates, our expectations regarding restructuring initiatives, including with respect to timing or costs, our expectations regarding investing in human capital and technology or our beliefs or expectations regarding working capital, capital expenditures, debt maintenance or commitments. These forward-looking statements are based on current expectations, estimates and forecasts, as well as the beliefs and assumptions of our management, and are subject to risks and uncertainties that are difficult to predict, including: our ability to maintain security levels and service performance that meet the expectations of our customers, and the resources and costs required to avoid unanticipated downtime and prevent, detect and remediate performance degradation and security breaches; the expenses associated with our data centers and third-party infrastructure providers; our ability to secure additional data center capacity; our reliance on third-party hardware, software and platform providers; uncertainties regarding artificial intelligence (“AI”) technology and its integration into our product offerings; the effect of evolving domestic and foreign government regulations, including those related to the provision of services on the Internet, those related to accessing the Internet, and those addressing data privacy, cybersecurity, cross-border data transfers and import and export controls; current and potential litigation involving us or our industry, including litigation involving acquired entities and the resolution or settlement thereof; regulatory developments and regulatory investigations involving us or affecting our industry; our ability to successfully introduce new services and product features, including any efforts to expand our services; the success of our strategy of acquiring or making investments in complementary businesses, joint ventures, services, technologies and intellectual property rights; our ability to complete, on a timely basis or at all, announced transactions; our ability to realize the benefits from acquisitions, strategic partnerships, joint ventures and investments, and successfully integrate acquired businesses and technologies; our ability to compete in the markets in which we participate; the success of our business strategy and our plan to build our business, including our strategy to be a leading provider of enterprise cloud computing applications and platforms; our ability to execute our business plans; our ability to continue to grow unearned revenue and remaining performance obligation; the pace of change and innovation in enterprise cloud computing services; the seasonal nature of our sales cycles; our ability to limit customer attrition and costs related to those efforts; the success of our international expansion strategy; the demands on our personnel and infrastructure resulting from significant growth in our customer base and operations, including as a result of acquisitions; our ability to preserve our workplace culture, including as a result of our decisions regarding our current and future office environments or remote work policies; our real estate and office facilities strategy and related costs and uncertainties; our dependency on the development and maintenance of the infrastructure of the Internet; fluctuations in, and our ability to predict, our operating results and cash flows; the variability in our results arising from the accounting for term license revenue products; the performance and fluctuations in the fair value of our investments in complementary businesses through our strategic investment portfolio; the impact of future gains or losses from our strategic investment portfolio, including gains or losses from overall market conditions that may affect the publicly traded companies within our strategic investment portfolio; our ability to protect our intellectual property rights; our ability to maintain and enhance our brands; the impact of foreign currency exchange rate and interest rate fluctuations on our results; the valuation of our deferred tax assets and the release of related valuation allowances; the potential availability of additional tax assets in the future; the impact of new accounting pronouncements and tax laws; uncertainties affecting our ability to estimate our tax rate; uncertainties regarding our tax obligations in connection with potential jurisdictional transfers of intellectual property, including the tax rate, the timing of transfers and the value of such transferred intellectual property; uncertainties regarding the effect of general economic, business and market conditions, including inflationary pressures, general economic downturn or recession, market volatility, increasing interest rates, changes in monetary policy and the prospect of a shutdown of the U.S. federal government; the potential impact of financial institution instability; the impact of geopolitical events, including the war in Ukraine and the Israel-Hamas war; uncertainties regarding the impact of expensing stock options and other equity awards; the sufficiency of our capital resources; our ability to execute our share repurchase program; our ability to declare future cash dividends; our ability to comply with our debt covenants and lease obligations; the impact of climate change, natural disasters and actual or threatened public health emergencies; the expected benefits of and timing of completion, as well as the expected costs and charges, of our restructuring initiatives, including, among other things, the risk that the restructuring costs and charges may be greater than we anticipate, our restructuring efforts may adversely affect our internal programs and our ability to recruit and retain skilled and motivated personnel, our restructuring efforts may be distracting to employees and management, our restructuring efforts may negatively impact our business operations and reputation with or ability to serve customers, and restructuring efforts may not generate their intended benefits to the extent or as quickly as anticipated; and our ability to achieve our aspirations, goals and projections related to our environmental, social and governance (“ESG”) initiatives, including our ability to comply with evolving legal standards and federal and state regulations concerning ESG matters. These and other risks and uncertainties may cause our actual results to differ materially and adversely from those 3Table of Contentsexpressed in our forward-looking statements. Readers are directed to risks and uncertainties identified below under “Risk Factors” and elsewhere in this report for additional detail regarding factors that may cause actual results or outcomes to be different than those expressed in our forward-looking statements. Except as required by law, we undertake no obligation to revise or update publicly any forward-looking statements for any reason.4Table of ContentsPART I. ITEM 1.    BUSINESSOverviewSalesforce, Inc. (“Salesforce,” the “Company,” “we” or “our”) is a global leader in customer relationship management (“CRM”) technology that brings companies and their customers together. Founded in 1999, we enable companies of every size and industry to connect with their customers through the power of data, AI, CRM and trust.  Our AI-powered Customer 360 platform unites sales, service, marketing, commerce and IT teams by connecting customer data across systems, apps and devices to create a complete view of customers. With this single source of customer truth, teams can be more responsive, productive and efficient and deliver intelligent, personalized and automated experiences across every channel.Our Customer 360 service offerings are designed to be flexible, scalable and easy to use. They can generally be configured easily, deployed rapidly and integrated with other platforms and enterprise applications. We sell to businesses worldwide, primarily on a subscription basis, through our direct sales efforts and also indirectly through partners. We also enable third parties to use our platform and developer tools to create additional functionality and new applications that run on our platform, which are sold separately from, or in conjunction with, our service offerings.Salesforce is committed to a core set of values: trust, customer success, innovation, equality and sustainability. Foremost among these is trust, which is the foundation for everything we do. Our customers trust our technology to deliver the highest levels of security, privacy, performance, compliance and availability at scale. Customer success is at the core of our business and we align the entire company around our customers’ needs to promote their success and show our value. We believe in continuous innovation, enabling our customers to access the latest technology advances so they can innovate and stay ahead in their industries. Equality is a core tenet of how we run our business. We value the equality of every individual at our company and in our communities. We believe that creating a diverse workplace that reflects the communities we serve and fostering an inclusive culture where everyone feels seen, heard and valued makes us a better company. Finally, we believe the world is in a climate crisis and that sustainability, including bold climate action, is the only way forward. We are committed to ambitious climate leadership solutions, and we're bringing the full power of Salesforce to help organizations achieve net zero emissions.We believe that our values create value, and the business of business is to make the world a better place for all of our stakeholders, including stockholders, customers, employees, partners, the planet and the communities in which we work and live. Salesforce is committed to giving back to our communities, closing the inequality gap and helping businesses grow while protecting the environment for future generations. We believe we have a broad responsibility to society, and we aspire to create a framework for the ethical and humane use of technology that not only drives the success of our customers, but also upholds the basic human rights of every individual. We are committed to transparent environmental, social and governance disclosures and maintaining programs that support the success of these initiatives.Our Service OfferingsWe believe that every business, in every industry, has to optimize for a digital-first experience for their customers, employees and partners, leveraging data and trusted AI and CRM technology to increase efficiency, boost productivity and drive growth. Our industry-leading Customer 360 CRM platform spans sales, service, marketing, commerce, collaboration, integration, AI, analytics, automation, industries and more. Our customers can select from our integrated Customer 360 solutions for any team, in any industry and for companies of any size to deliver AI-powered, personalized engagement across every customer touchpoint with hyperscale data and automation. Customer 360 service offerings are designed to work together and include:Sales. Our Sales offering leverages data and AI to help sales teams sell faster and smarter, and to efficiently manage and automate entire sales processes. Our customers use our Sales offering to store data; monitor leads and progress; forecast opportunities; gain insights through AI and analytics; and deliver quotes, contracts and invoices. With our AI technology, sales teams can identify the best sales leads, automatically summarize highlights from meeting notes, auto-generate emails, surface customer sentiment and receive recommended next steps. Our Sales offering enables teams to work from anywhere in the office, on the go or at home and supports the changing expectations of customers in a digital-first world.Service. Our Service offering enables companies in every industry to bring all of their customer service and field service needs onto one integrated, AI-powered platform to deliver trusted, highly personalized customer support at scale. Organizations use our Service offering to connect their service agents with customers anytime and across multiple channels — from the phone and email to self-service portals and social media — allowing customers to engage with companies in the ways that best suit them. Our Service offering also helps our customers maximize productivity, resolve cases faster and improve customer satisfaction by automating routine tasks. With our AI technology, service teams can automatically route cases to the best service agent for the job, respond to customers with personalized, relevant answers grounded in company data and perform tasks like auto-summarizing support cases and field work orders. Our Service offering provides a field service solution that enables 5Table of Contentscompanies to connect agents, dispatchers and mobile employees through one centralized platform, on which they can intelligently schedule and dispatch work as well as track and manage jobs.Platform and Other.Platform.  Our Platform offering is an agile and trusted way for enterprises to innovate and deliver digital transformation at scale, enabling companies of all sizes, locations and industries to build business workflows and apps that bring them closer to their customers. It unifies data, AI, CRM, development, security and compliance in a single, comprehensive platform, facilitating fast development of trusted, AI-powered apps and automation that boost efficiency, increase productivity and save on IT costs. Einstein, our AI productivity and development platform, brings AI into Salesforce apps and workflows and offers the ability to deploy conversational, generative AI assistants that empower teams to get work done without compromising data security and privacy. The Salesforce platform and applications can be delivered rapidly and reliably to locations worldwide, giving customers more choice and control over data residency.  Platform also includes AppExchange, a marketplace for Salesforce partner apps and experts, and Trailhead, our free online learning platform that allows anyone to learn in-demand Salesforce skills. Slack. Our Slack offering is an intelligent productivity platform that digitally connects people, technology and business processes together in one place. Slack improves performance by empowering users with no-code workflow automation, making search and knowledge sharing seamless and keeping teams connected and engaged as they move work forward together. With our AI technology built into Slack, organizations can easily summarize and search their customer data and essential employee knowledge so they can work smarter and make smarter decisions faster. Slack is deeply integrated into the Customer 360, supercharging productivity across sales, service and marketing teams. With Slack Sales Elevate, for example, sales teams can improve productivity and accelerate deals to close by bringing together the right people, processes and customer data from Sales Cloud within Slack.Marketing and Commerce. Marketing. Our Marketing offering enables companies to plan, personalize, automate and optimize one-to-one customer marketing journeys, connecting interactions across email, mobile, social, web and connected products to increase conversion and customer lifetime value. With our AI technology infused across the entire campaign lifecycle, companies can create precise audience segments and content using natural language prompts; identify top prospects and leads; and deliver personalized marketing journeys based on customer behavior. With our Marketing offering and Data Cloud, companies can unify and connect their customer data and engagement with our Sales, Commerce and Service offerings to give companies a single source of truth for the customer relationship.Commerce. Our Commerce offering enables brands to simplify everything from setting up a digital storefront to generating product descriptions. Our Commerce offering helps brands streamline purchases by unifying the shopping experience across every customer touchpoint, including mobile, web, social and store, and drive increased engagement, conversion, loyalty and revenue from their customers. With our AI technology, brands can provide product recommendations based on customers’ purchasing history; generate product descriptions and web pages; and deliver personalized shopping assistance using natural language. Our Commerce offering also delivers click-to-code tools, which provide customers with the ability to quickly build and deploy our solutions around their customers as markets, industries and customers change.Integration and Analytics. Integration. Our unified Integration, Automation and API Management offerings, powered by MuleSoft, provide the essential building blocks to deliver end-to-end, connected experiences. With MuleSoft, customers connect any data, or AI model securely and automate tasks and processes, using discoverable and reusable APIs and integrations, to transform businesses and drive faster time to value.Analytics. Our Analytics offering, including Tableau, provides customers with an advanced, end-to-end analytics solution serving a broad range of enterprise use cases, powered by trusted AI. It offers customers intelligent analytics capabilities to better see, understand and act on business data from any source, using AI models and natural language to enable them to work more efficiently, spot trends, predict outcomes, create summaries, get timely recommendations and take action from any device within the flow or work. With Data Cloud, analytics customers can quickly visualize, automate, explore and act on data from any source. Other Customer 360 Service OfferingsIn addition to our solution specific service offerings, we have specialized solutions that work across all offerings to support the capabilities our customers’ business needs. These additional service offerings include:   Data Cloud. Data Cloud is our hyperscale, trusted data engine native to Salesforce. It brings a company’s disconnected, enterprise data into Salesforce to deliver an actionable, comprehensive, 360-degree view of a customer. With Data Cloud, teams across an organization are empowered with access to comprehensive data and insights about customers, including customer interactions with a company’s products and services, enabling organizations to deliver personalized customer experiences. 6Table of ContentsUsing an open and extensible architecture that is core to the Einstein 1 Platform, Data Cloud leverages the power of Salesforce metadata to enable companies to ingest and federate data to power automation and analytics across multiple service offerings. By bringing together structured and unstructured data, Data Cloud offers fast and secure entry into AI for outcomes that are accurate, relevant and grounded with a company’s data. Industries. Our industry vertical service offerings are suited to meet the needs of our customers across specific industries, such as financial services, healthcare and life sciences, manufacturing, automotive and government. They include out-of-the-box capabilities that leverage the full power of Salesforce and provide the speed and flexibility to keep up with changing times and customer demands, accelerating time to value.Salesforce Starter. We offer Salesforce Starter, an all-in-one, easy-to-use solution for small- and medium-size businesses built on our Customer 360 platform that brings marketing, sales and service together to help small and growing businesses manage customer relationships, centralize key data, and grow more efficiently.  With ease of purchase through self-serve and customized out-of-the-box features, Salesforce Starter helps customers increase productivity, save time and cut costs.Business Benefits of Using Our SolutionsThe key advantages of our solutions include the following:•an industry-leading, AI-powered integrated CRM platform for business-to-business, business-to-consumer and business-to-employee for the all-digital, work-from-anywhere world;•scalable, efficient and flexible solutions for any size company or industry;•a single source of truth that connects customer data across systems, apps and devices to help companies sell, service, market and conduct commerce from anywhere;•the ability to unlock companies’ customer data across their business, see and understand their data with advanced analytics, make predictions with pervasive AI, automate tasks and personalize every interaction; •the ability to infuse trusted AI in the flow of work and create AI assistants that help make the customer experience more intelligent, automated and personalized, and employees more productive;•the ability to collaborate easily with customers, employees, partners and systems;•modern low-code and no-code tools powered by leading edge AI, which empowers developers and business users to create digital experiences and configure and automate business processes to fit the needs of any business, accelerating time to value;•the ability to accelerate adoption and drive results with purpose-built, compliant tools and processes that deliver out-of-the-box functionality, security and interoperability; and•an enterprise application marketplace and a community of over 21 million Trailblazers: passionate developers, admins and experts who use Salesforce to innovate and extend the platform with thousands of partner apps.Our Business and Growth StrategyWe continue to expand in the growing addressable markets across all of our service offerings. We continue to focus on several key growth levers, including driving multiple service offering adoption, increasing our penetration with enterprise and international customers and our industry-specific reach with more vertical software solutions. We orient our business strategy and invest for future growth by focusing on the following key priorities:Expand relationships with existing customers. We see significant opportunities to deepen existing customer relationships through cross-selling and upselling our service offerings. For example, we continue to focus on driving multiple service offering adoption, which provides our customers with a one-stop-shop for their front-office business technology needs. As our customers realize the benefits of our entire suite of service offerings, we aim to upgrade the customers’ experience with new products and features and gain additional subscriptions by targeting new functional areas and business units. Finally, we aim to expand our relationships with existing customers through our additional support offerings.Increase geographic reach. By extending our go-to-market capabilities globally, we aim to grow our business by selling to new customers in new regions. We will continue to pursue businesses of all sizes in most major markets globally. We also plan to continue to develop distribution channels through new and existing marketplaces and partners for our solutions around the globe and new go-to-market strategies. We continue to invest in our domestic and international operations and infrastructure to deliver the highest-quality service to our customers around the world.Focus on industries and new products. As part of our growth strategy, we are delivering innovative and value-driven solutions in new categories based on our existing and potential customers’ needs. For example, we provide out-of-the-box solutions specifically built for customers in certain industries, such as financial services, healthcare and life sciences, manufacturing and more. In addition, through direct discussions and strategic engagements with our customers, we are able to deliver the innovations and enhancements that align with the needs of our customers. As a result of customer feedback, in fiscal 2024 we introduced the Einstein 1 platform, which allows our customers to connect data to build AI-powered apps with low-code and deliver entirely new CRM experiences, and we also introduced new industry clouds, including our Automotive or Professional Services industries. 7Table of ContentsLeverage our partner ecosystem. The Customer 360 Platform enables customers, independent software vendors (“ISVs”) and third-party developers to create, test and deliver cloud-based apps. These apps can be marketed and sold on the AppExchange, our enterprise cloud marketplace, or sold directly by software vendors. In addition, we rely on our consulting partners to deliver technology solutions and expertise to customers, from large-scale implementations to more limited solutions that help businesses run more efficiently. We continue to work with and invest in our partner ecosystem, including these ISVs and system integrators (“SIs”), to accelerate our reach into new markets and industries. Promote strong customer adoption and reduce customer attrition. We believe that we have the people, processes and proven innovation to help companies transform successfully. Our customer success programs, including success management resources, advisory services, technical architects and business strategists, help enable and accelerate our customers’ digital transformations. In addition, we have free, curated resources such as Trailhead to help companies learn our systems and a community of Trailblazers who drive innovation. With these programs and resources, we aim to reduce attrition and secure renewals of existing customer subscriptions.Mergers and Acquisitions and Strategic InvestmentsWe evaluate opportunities to acquire or invest in complementary businesses, services, technologies and intellectual property to complement our organic innovation and advance the development of our Customer 360 Platform. Our evaluation seeks to ensure that any potential acquisition accelerates our Customer 360 strategy, represents an attractive customer opportunity, provides a pathway to effectively monetize the acquired products and drive significant operational efficiencies and presents a clear timeline for value accretion. Our acquisitions can range in size and complexity, from those that enhance or complement existing products and accelerate development of features to large-scale acquisitions that result in new service offerings. Our goal is to prioritize the use of our balance sheet, through cash and debt, to complete acquisitions.We also manage a portfolio of strategic investments in both privately held and publicly traded companies focused primarily on enterprise cloud companies, technology startups and SIs. Our investments range from early to late stage companies, including investments made concurrent with a company’s initial public offering. We invest in companies that we believe are digitally transforming their industries, improving customer experiences, helping us expand our solution ecosystem or supporting other corporate initiatives, including AI. We plan to continue making these types of strategic investments as opportunities arise that we find attractive, including investments in companies representing targeted businesses,  technological initiatives and geographies. Our strategy includes growing our strategic investment portfolio, in part, by reinvesting proceeds from the sales of strategic investments.Technology, Development and OperationsWe primarily deliver our solutions as highly scalable cloud computing application and platform services on a multi-tenant technology architecture. Multi-tenancy is an architectural approach that allows us to operate a single application instance for multiple organizations, treating all customers as separate tenants who run in virtual isolation from each other. This approach allows us to spread the cost of delivering our services across our user base and scale our business faster than traditional software vendors while focusing our resources on building new functionality and enhancing existing offerings.We have historically provided, and continue to provide, our services to our customers from infrastructure designed and operated by us but secured within third-party data center facilities. In combination with these third-party data center facilities, we also provide our services via cloud computing platform partners who offer Infrastructure-as-a-Service, including servers, storage, databases and networking. We continue to invest and expand the deployment of Hyperforce, which allows our platform and applications to be delivered rapidly and reliably to locations worldwide and provides our customers autonomy and control over data residency.Our technology and product efforts are focused on improving and enhancing the features, functionality, performance, availability and security of our existing service offerings, as well as developing new features, functionality and services. We also remain focused on integrating businesses, services and technologies from acquisitions. Performance, functional depth, security, usability, ease of integration and configuration and sustainability of our solutions influence our technology decisions and product direction.CompetitionThe market for our service offerings is highly competitive, rapidly evolving and fragmented, and subject to changing technology with low barriers to entry, shifting customer needs and frequent introductions of new products and services.Our current competitors include:•vendors of packaged business software, as well as companies offering enterprise apps delivered through on-premises offerings from enterprise software application vendors and cloud computing application service providers, either individually or with others;8Table of Contents•software companies that provide their product or service free of charge as a single product or when bundled with other offerings, or only charge a premium for advanced features and functionality, as well as companies that offer solutions that are sold without a direct sales organization;•vendors who offer software tailored to specific services, industries or market segments, as opposed to our full suite of service offerings including suppliers of traditional business intelligence and data preparation products, integration software vendors, marketing vendors or e-commerce solutions vendors;•productivity tool and email providers, unified communications providers and consumer application companies that have entered the business software market; and•traditional platform development environment companies and cloud computing development platform companies who may develop toolsets and products that allow customers to build new apps that run on the customers’ current infrastructure or as hosted services, as well as would-be customers who may develop enterprise applications for internal use.We believe more companies may become competitive threats due to the attractiveness of the markets in which we operate. We also expect our competition to change and evolve as we expand into more markets, with new offerings.CustomersWe sell to businesses of all sizes and in almost every industry worldwide. The number of paying subscriptions at each of our customers ranges from one to hundreds of thousands. None of our customers accounted for more than five percent of our revenues in fiscal years 2024, 2023 or 2022. In addition, we do not have any material dependencies on any specific product, service or particular group or groups.Customer Service and SupportWe offer professional services to help customers achieve business results faster with Salesforce solutions. Our architects and innovation program teams act as advisors to plan and execute digital transformations for our customers. This includes implementation services for multi-cloud and complex deployments. We provide best-practices and AI-based recommendations and adoption programs globally. In addition, we provide advanced education, including in-person and online courses, to certify our customers and partners on architecting, administering, deploying and developing our service offerings.Our global customer support group responds to both business and technical inquiries about the use of our products via the web, telephone, email, social networks and other channels. We provide standard customer support during regular business hours to customers as part of our paying subscription editions. We also offer premier customer support that is either included in a premium success offering or sold for an additional fee, which can include services such as priority access to technical resources, developer support and system administration. In addition, we offer a premier priority support add-on that includes proactive monitoring, rapid incident response and instruction from a dedicated support team knowledgeable about the customer's specific enterprise architecture.Sales and MarketingWe sell our services primarily through our direct sales force, which comprises telephone sales personnel based in regional hubs, field sales personnel based in territories close to their customers and self-service offerings.To a lesser extent, we also utilize a network of partners who refer sales leads to us and assist in selling to prospects. This network includes global consulting firms, SIs and other partners. In return, we typically pay these partners a fee based on the first-year subscription revenue generated by the customers whom they refer. We continue to invest in developing additional distribution channels for our subscription services.We use a variety of marketing programs across traditional and social channels to target our prospective and current customers, partners and developers. We focus our marketing activities in the cities and countries with the largest market opportunities. Our primary marketing activities include:•multichannel marketing campaigns that span email, social media, the web, television and more, which align to a broader customer journey;•in-person and virtual customer events of all sizes to create customer and prospect awareness, including proprietary events such as Dreamforce and our virtual Dreamforce to You, World Tours and other virtual events, as well as participation in trade shows and industry events;•live events and original programming on our Salesforce+ streaming service, which includes discussions about the future of technology in the digital-first, work anywhere world and educational content to learn new skills and pursue new career opportunities;•press and industry analyst relations to garner third-party validation and generate positive coverage for our company, brand, service offerings and value proposition;•partner co-marketing activities with global and regional implementation partners;9Table of Contents•customer testimonials and our community of Trailblazers: individuals who drive innovation, grow their careers and transform their businesses using the Customer 360 platform;•in-person and virtual technology event sponsorships; and•event partnerships with high-profile global brands and organizations.Intellectual PropertyWe rely on a combination of trademarks, copyrights, trade secrets, patents and contractual provisions to protect our proprietary technology and our brands. We also enter into confidentiality and proprietary rights agreements with our employees, consultants and other third parties and control access to software, services, documentation and other proprietary information. We believe the duration of our patents is adequate relative to the expected lives of our service offerings. We also purchase or license technology that we incorporate into our products or services. At times, we make select intellectual property broadly available at no or low cost to achieve a strategic objective, such as promoting industry standards, advancing interoperability, supporting open source software or attracting and enabling our external development community. While it may be necessary in the future to seek or renew licenses relating to various aspects of our products and business methods, we believe, based upon past experience and industry practice, such licenses generally could be obtained on commercially reasonable terms.Human Capital ManagementSalesforce is committed to a core set of values: trust, customer success, innovation, equality and sustainability. These core values are the foundation of our company culture, which we believe is fundamental to, and a competitive advantage in, our approach to managing our workforce. We believe our company culture fosters open dialogue, collaboration, recognition and a sense of belonging, all of which allow us to attract and retain the best talent, which is critical for our continued success. For example, our sales, engineering and customer success teams are critical to our ability to grow, innovate, and promote the trust and success of our customers.We believe our efforts in managing our workforce have been effective. Our focus on our workplace environment and a strong company culture has led to recognition across the globe, as evidenced by the following awards: Ethisphere’s World’s Most Ethical Companies (2023 and for the 14th time), Fortune World's Most Admired Companies (2023 and for the ninth year in a row), Fortune 100 Best Companies to Work For (2023 and for the 14th year in a row), Fortune World’s Most Innovative Companies (2023, inaugural list), a score of 100 on the Human Rights Campaign Corporate Equality Index, (the seventh year in a row), a top-four Software company on the American Opportunity Index (2023) and Glassdoor Employees' Choice Best Place to Work in Canada, France, Germany, the United Kingdom and the United States (2022).As of January 31, 2024, we had 72,682 employees, of which approximately 51 percent were located in the United States and 49 percent were located internationally and approximately 36 percent identified as women, 64 percent identified as men and less than one percent identified as non-binary or other. None of our employees in the United States are represented by a labor union. However, employees of certain foreign subsidiaries are represented by works councils.We have continued to invest in equality, diversity and inclusion initiatives, development programs, employee engagement and ongoing communications and feedback. For additional information on our workforce, refer to our annual Stakeholder Impact Report, https://salesforce.com/stakeholder-impact-report. Some of our key human capital management initiatives are summarized below:Equality, Diversity and InclusionEquality is a core value at Salesforce. We aim to create a workplace that reflects the diverse communities we serve and empowers our employees to succeed and perform at their best. Equality is deeply embedded in our culture and critical to our business. We believe values create value and strengthen our ability to grow the business, support employees and serve customers. Our 5-part equality strategy is to (1) advance representation, (2) focus on employee experience, (3) design our systems with equality at the center, (4) act with a global mindset and (5) engage all of our stakeholders across our ecosystem in the work we do. We are on a continuous journey to move closer to equality for all. In addition, we strive to align and accelerate our equality, diversity and inclusion initiatives and, beginning in fiscal 2023, all executive vice presidents, presidents and executive officers had a component of their incentive compensation plans tied to employee diversity measures.Talent and Career DevelopmentWe offer our employees various talent development programs to create a culture of continuous learning. Learning and development opportunities include Trailhead, our learning platform available for all employees, in-person and virtual classes, guides, workbooks and more. We encourage our employees to seek personal and professional development opportunities with external organizations and offer yearly education reimbursement to employees who wish to continue job-related education from accredited institutions or organizations.10Table of ContentsTotal RewardsWe believe offering competitive compensation packages and robust benefits is an important factor in our ability to attract, retain and motivate our employees and to help enhance their everyday wellbeing. We use a combination of fixed and variable cash compensation for all employees and award equity compensation to certain employees in the form of stock options, restricted stock units and performance-based restricted stock units. Eligible employees are also able to participate in our Employee Stock Purchase Plan, which allows employees to purchase our stock at a 15 percent discount up to U.S. Internal Revenue Code limits. We also match up to $5,000 of donations, per employee, to eligible nonprofit organizations. We offer employees benefits that vary by country and are designed to meet or exceed local laws and to be competitive in the marketplace.Our V2MOM and Code of ConductAlignment and consistent and clear communication are a key part of our employee engagement, especially as we continue to grow. Each year, we complete a corporate V2MOM, which is an internal management tool used to align the Company on our vision, values, methods, obstacles and measures for the upcoming year. All employees are then expected to complete their own V2MOM that aligns with the corporate V2MOM. In addition, our Code of Conduct reflects that our core values remain the foundation of the Company and directly impact our ability to deliver success. We expect all of our employees to commit to acting with integrity and treating others with compassion and respect.Employee Engagement & SatisfactionOur leadership strives for active engagement with our employees through a variety of channels, including all-company meetings and our daily newsletter, The Daily, allowing employees to stay connected with the business and new developments. Twice a year, our employees have an opportunity to complete a confidential survey that allows Salesforce to measure employee engagement, the health of our culture and how we are living up to our values. Our employee survey is an important employee listening tool and drives real change across the Company. Available InformationOur Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission (“SEC”), and all amendments to these filings, can be obtained free of charge from our website at http://investor.salesforce.com/financials/ or by contacting our Investor Relations department at our office address listed above following our filing of any of these reports with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents of these and other websites referenced throughout the filing are not incorporated and do not constitute a part of this filing. Further, our references to the URLs for these websites are intended to be inactive textual references only.Our principal executive offices are located in San Francisco, California. Our principal address is Salesforce Tower, 415 Mission St., 3rd Floor, San Francisco, California 94105, and our primary website address is www.salesforce.com.11Table of ContentsITEM 1A. RISK FACTORSThe risks and uncertainties described below are not the only ones facing us. Other events that we do not currently anticipate or that we currently deem immaterial also may affect our business, financial condition, results of operations, cash flows, other key metrics and the trading price of our common stock.Risk Factor SummaryOperational and Execution Risks•Any breaches in our security measures or those of our third-party data center hosting facilities, cloud computing platform providers or third-party service partners, or the underlying infrastructure of the Internet that cause unauthorized access to a customer’s data, our data or our IT systems, or the blockage or disablement of authorized access to our services.•Any defects or disruptions in our services that diminish demand for our services.•Any interruptions or delays in services from third parties, including data center hosting facilities, cloud computing platform providers and other hardware and software vendors, or from our inability to adequately plan for and manage service interruptions or infrastructure capacity requirements.•An inability to realize the expected business or financial benefits of company and technology acquisitions.•Strain on our personnel resources and infrastructure from supporting our existing and growing customer base or an inability to scale our operations and increase productivity.•Customer attrition, or our inability to accurately predict subscription renewals and upgrade rates.•Disruptions caused by periodic changes to our sales organization.•Dependency of our services on the development and maintenance of the infrastructure of the Internet by third parties.•Exposure to risks inherent in international operations from sales to customers outside the United States.•A more time-consuming and expensive sales cycle, pricing pressure and implementation and configuration challenges as we target more of our sales efforts at larger enterprise customers.•Any loss of key members of our management team or development and operations personnel, or inability to attract and retain employees necessary to support our operations and growth.•Any failure in the delivery of high-quality professional and technical support services related to our online applications.Strategic and Industry Risks•An inability to compete effectively in the intensely competitive markets in which we participate.•Any failure to expand our services and to develop and integrate our existing services in order to keep pace with technological developments.•An inability to maintain and enhance our brands.•Partial or complete loss of invested capital, or significant changes in the fair value, of our strategic investment portfolio. •Any discontinuance by third-party developers and providers in embracing our technology delivery model and enterprise cloud computing services, or customers asking us for warranties for third-party applications, integrations, data and content.•Social and ethical issues, including the use or capabilities of AI in our offerings.•Risks related to our aspirations and disclosures related to ESG matters.Legal and Regulatory Risks•Privacy concerns and laws as well as evolving regulation of cloud computing, increased restriction of cross-border data transfers and other regulatory developments.•Evolving or unfavorable industry-specific regulations, requirements, interpretive positions or standards.•Lawsuits against us by third parties for various claims, including alleged infringement of proprietary rights.•Any failure to obtain registration or protection of our intellectual property rights.•Risks related to government contracts and related procurement regulations.•Governmental sanctions and export and import controls that could impair our ability to compete in international markets and may subject us to liability.12Table of ContentsFinancial Risks•Downturns or upturns in new business, which may not be immediately reflected in our operating results because we generally recognize revenue from subscriptions for our services over the term of the subscription.•Significant fluctuations in our rate of anticipated growth and any failure to balance our expenses with our revenue forecasts.•Unanticipated changes in our effective tax rate and additional tax liabilities and global tax developments.•Fluctuations in currency exchange rates, particularly the U.S. Dollar versus local currencies.•Our debt service obligations, lease commitments and other contractual obligations.•Accounting pronouncements and changes in other financial and non-financial reporting standards.Risks Related to Owning Our Common Stock•Fluctuations in our quarterly results.•Volatility in the market price of our common stock and associated litigation.•Provisions in our certificate of incorporation and bylaws and Delaware law that might discourage, delay or prevent a change of control of the Company or changes in our management.General Risks•Volatile and significantly weakened global economic conditions.•The occurrence of natural disasters and other events beyond our control.•The long-term impact of climate change on our business.Operational and Execution RisksIf our security measures or those of our third-party data center hosting facilities, cloud computing platform providers or third-party service partners, or the underlying infrastructure of the Internet are breached, and unauthorized access is obtained to a customer’s data, our data or our IT systems, or authorized access is blocked or disabled, our services may be perceived as not being secure, customers may curtail or stop using our services, and we may incur significant reputational harm, legal exposure and liabilities, or a negative financial impact.Our services involve the storage and transmission of our customers’ and our customers’ customers’ proprietary and other sensitive data, including financial, health and other personal information. Our services and underlying infrastructure may in the future be materially breached or compromised as a result of the following:•third-party attempts to fraudulently induce our employees, partners or customers to disclose sensitive information such as user names, passwords or other information to gain access to our customers’ data or IT systems, or our data or our IT systems;•efforts by individuals or groups of hackers and sophisticated organizations, such as state-sponsored organizations or nation-states, to launch coordinated attacks, including ransomware, destructive malware and distributed denial-of-service attacks;•third-party attempts to abuse our marketing, advertising, messaging or social products and functionalities to impersonate persons or organizations and disseminate information that is false, misleading or malicious;•cyberattacks on our internally built infrastructure on which many of our service offerings operate, or on third-party cloud-computing platform providers;•vulnerabilities resulting from enhancements and updates to our existing service offerings;•vulnerabilities in the products or components across the broad ecosystem that our services operate in conjunction with and are dependent on;•vulnerabilities existing within new technologies and infrastructures, including those from acquired companies;•attacks on, or vulnerabilities in, the many different underlying networks and services that power the Internet that our products depend on, most of which are not under our control or the control of our vendors, partners or customers; and•employee or contractor errors or intentional acts that compromise our security systems.These risks are mitigated, to the extent possible, by our ability to maintain and improve business and data governance policies, enhanced processes and internal security controls, including our ability to escalate and respond to known and potential risks. Our Board of Directors (“Board”), Cybersecurity and Privacy Committee and executive management are regularly briefed on our cybersecurity policies and practices and ongoing efforts to improve security, as well as updates on cybersecurity events. We can provide no assurances that our security measures, including implemented systems and processes designed to protect our customers’ and our customers’ customers’ proprietary and other sensitive data, will provide absolute security or otherwise be 13Table of Contentseffective or that a material breach will not occur. For example, our ability to mitigate these risks may be impacted by the following: •frequent changes to, and growth in complexity of, the techniques used to breach, obtain unauthorized access to, or sabotage IT systems and infrastructure, including as a result of the increased use of AI technologies by bad actors, which are generally not recognized until launched against a target, and could result in our being unable to anticipate or implement adequate measures to prevent such techniques;•the continued evolution of our internal IT systems as we early adopt new technologies and new ways of sharing data and communicating internally and with partners and customers, which increases the complexity of our IT systems;•the acquisition of new companies, requiring us to incorporate and secure different or more complex IT environments;•authorization by our customers to third-party technology providers to access their customer data, which may lead to our customers’ inability to protect their data that is stored on our servers; and •our limited control over our customers or third-party technology providers, or the processing of data by third-party technology providers, which may not allow us to maintain the integrity or security of such transmissions or processing.In the normal course of business, we are and have been the target of malicious cyberattack attempts and have experienced other security incidents. Although, to date, such identified security events have not been material or significant to us, including to our reputation or business operations, or had a material financial impact, there can be no assurance that future cyberattacks will not be material or significant. Additionally, as our market presence grows, we may face increased risks of cyberattack attempts or security threats, and as AI technologies, including generative AI models, develop rapidly, threat actors may use these technologies to create new sophisticated attack methods that are increasingly automated, targeted and coordinated and more difficult to defend against.A security breach or incident could result in unauthorized parties obtaining access to, or the denial of authorized access to, our IT systems or data, or our customers’ systems or data, including intellectual property and proprietary, sensitive or other confidential information. A security breach could also result in a loss of confidence in the security of our services, damage our reputation, negatively impact our future sales, disrupt our business and lead to increases in insurance premiums and legal, regulatory and financial exposure and liability. Further, there can be no assurance that our insurance coverage will be sufficient to cover the financial, legal, business, or reputational losses that may result from a cybersecurity incident or breach of our IT systems. Finally, the detection, prevention and remediation of known or potential security vulnerabilities, including those arising from third-party hardware or software, may result in additional financial burdens due to additional direct and indirect costs, such as additional infrastructure capacity spending to mitigate any system degradation and the reallocation of resources from development activities. For example, in April 2022, we learned a threat actor had obtained unauthorized access to several databases on Heroku, a Salesforce platform-as-a-service. The threat actor downloaded stored customer security credentials and passwords for logging into GitHub, a third-party code hosting service used by both Heroku and Heroku customers. The threat actor was also able to download passwords for a subset of customer user accounts and access the encryption key. While we do not believe this incident materially affected our business or financial results, there is no assurance that such circumstances or other similar incidents in the future could not result in a material adverse effect on our business.Defects or disruptions in our services could diminish demand for our services and subject us to substantial liability.Because our services are complex and incorporate a variety of hardware, proprietary software, third-party and open-source software, our services may have errors or defects that could result in unanticipated downtime for our subscribers and harm to our reputation and our business. Our customers may also use our services in unanticipated ways that may cause a disruption in services for other customers attempting to access their data. Across the industry, cloud services frequently contain undetected errors when first introduced or when new versions or enhancements are released. We may also encounter difficulties integrating acquired or licensed technologies into our services and in augmenting the technologies to meet the quality standards that are consistent with our brand and reputation. As a result, our services may contain errors or defects resulting from the complexities of integrating new technologies. We have from time to time found defects in, and experienced disruptions to, our services and new defects or disruptions may occur in the future. Such defects could be the result of employee, contractor or other third-party acts or inaction, and could negatively affect our brand and reputation. We have experienced and may in the future experience defects in our products that created vulnerabilities that inadvertently permitted access to protected customer data. We can provide no assurance that such product defects or other vulnerabilities will not occur in the future that have a material adverse effect on our business or subject us to substantial liability. Vulnerabilities in open source or any proprietary or third-party product can persist even after security patches have been issued if customers have not installed the most recent updates, or if the attackers exploited the vulnerabilities before patching was complete. In some cases, vulnerabilities may not be immediately detected, which may make it difficult to recover critical services and lead to damaged assets. 14Table of ContentsSince our customers use our services for important aspects of their business, any errors, defects, disruptions in service or other performance problems could hurt our reputation and may damage our customers’ businesses. As a result, customers could elect to not renew our services or delay or withhold payment to us. We could also lose future sales or customers may make warranty or other claims against us, which could result in an increase in our allowance for doubtful accounts, an increase in collection cycles for accounts receivable or the expense and risk of litigation.Any interruptions or delays in services from third parties, including data center hosting facilities, cloud computing platform providers and other hardware and software vendors, or from our inability to adequately plan for and manage service interruptions or infrastructure capacity requirements, could impair the delivery of our services and harm our business.We currently serve our customers from third-party data center hosting facilities and cloud computing platform providers located in the United States and other countries. We also rely on computer hardware purchased or leased from, software licensed from, and cloud computing platforms provided by, third parties in order to offer our services, including database software, hardware and data from a variety of vendors. Any disruption or damage to, or failure of our systems generally, including the systems of our third-party platform providers, could result in interruptions in our services and harm our business. We have from time to time experienced interruptions in our services and such interruptions may occur in the future. As we increase our reliance on these third-party systems, particularly with respect to third-party cloud computing platforms, our exposure to damage from service interruptions or other performance or quality issues may increase. Interruptions in our services or other performance or quality issues may cause us to issue credits or pay penalties, cause customers to make warranty or other claims against us or to terminate their subscriptions, and adversely affect our attrition rates and our ability to attract new customers, all of which would reduce our revenue. Our business and reputation would also be harmed if our customers and potential customers believe our services are unreliable.For many of our offerings, our production environment and customers’ data are replicated in a separate facility located elsewhere. Certain offerings, including some offerings of companies added through acquisitions, may be served through alternate facilities or arrangements. We do not control the operation of any of these facilities, and they may be vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunications failures and similar events. They may also be subject to break-ins, sabotage, intentional acts of destruction or vandalism or similar misconduct, as well as local administrative actions (including shelter-in-place or similar orders), changes to legal or permitting requirements and litigation to stop, limit or delay operation. In addition, supply chain disruptions due to geopolitical developments in Europe may also lead to power disruptions in regions where our facilities are located. Despite precautions taken at these facilities, such as disaster recovery and business continuity arrangements, the occurrence of any of the foregoing events or risks, or a natural disaster or public health emergency, an act of terrorism, a decision to close the facilities without adequate notice or other unanticipated problems or operational failures at these facilities could result in lengthy interruptions in our services, and no assurance can be provided that any such interruptions would be remediated without significant cost or in a timely manner or at all.The hardware, software, data and cloud computing platforms that we rely on, including, for example, the large language models leveraged in our AI offerings, may not continue to be available at reasonable prices, on commercially reasonable terms or at all. Any loss of the right to use any of these hardware, software, data or cloud computing platforms could significantly increase our expenses and disrupt or otherwise result in delays in the provisioning of our services until equivalent technology is either developed by us, or, if available, is identified, obtained through purchase or license and integrated into our services, and no assurance can be provided that such equivalent technology would be developed or obtained in a timely manner or at all.As we scale our operations, the amount and type of information transferred on our offerings continues to evolve, including as a result of the deployment of AI technologies, and our infrastructure capacity requirements, including network capacity and computing power, may increase as a result. If we do not accurately plan for our infrastructure capacity requirements and we experience significant strains on our data center capacity, our customers could experience performance degradation or service outages that may subject us to financial liabilities, result in customer losses and harm our reputation and business. As we add data centers and capacity and continue to move to cloud computing platform providers, we move or transfer our data and our customers’ data from time to time. Despite precautions taken during this process, any unsuccessful data transfers may impair the delivery of our services, which may damage our business.As we acquire companies or technologies, we may not realize the expected business or financial benefits and the acquisitions could prove difficult to integrate, disrupt our business, dilute stockholder value and adversely affect our operating results and the market value of our common stock.As part of our business strategy, we periodically acquire complementary businesses, joint ventures, services and technologies and intellectual property rights. We continue to evaluate such opportunities and expect to make such acquisitions in the future. Acquisitions and other transactions and arrangements involve numerous risks and could create unforeseen operating difficulties and expenditures, including:15Table of Contents•potential failure to achieve the expected benefits on a timely basis or at all;•potential identified or unknown security vulnerabilities in acquired products that expose us to additional security risks or delay our ability to integrate the product into our service offerings;•difficulties in increasing or maintaining the security standards for acquired technology consistent with our other services, and related costs; •difficulty of transitioning the acquired technology onto our existing platforms and customer acceptance of multiple platforms on a temporary or permanent basis; •augmenting the acquired technologies and platforms to the levels that are consistent with our brand and reputation;•brand or reputational harm associated with our acquired companies;•challenges converting the acquired company’s revenue recognition policies and forecasting the related revenues, including subscription-based revenues and software license revenue, as well as appropriate allocation of the customer consideration to the individual deliverables;•division of financial and managerial resources from existing operations;•challenges entering into new markets in which we have little or no experience or where competitors may have stronger market positions;•currency and regulatory risks associated with foreign countries and potential additional cybersecurity and compliance risks resulting from entry into new markets;•difficulties and strain on resources in integrating acquired operations, technologies, services, platforms and personnel;•regulatory challenges from antitrust or other regulatory authorities that may block, delay or impose conditions (such as divestitures, ownership or operational restrictions or other structural or behavioral remedies) on the completion of transactions or the integration of acquired operations;•failure to fully assimilate, integrate or retrain acquired employees, which may lead to retention risk with respect to both key acquired employees and our existing key employees or disruption to existing teams;•differences between our values and those of our acquired companies, as well as disruptions to our workplace culture;•inability to generate sufficient revenue to offset acquisition costs;•challenges with the acquired company’s customers and partners, including the inability to maintain such relationships and changes to perception of the acquired business as a result of the acquisition;•challenges with the acquired company’s third-party service providers, including those that are required for ongoing access to third-party data; •potential for acquired products to impact the profitability of existing products;•unanticipated expenses related to acquired technology and its integration into our existing technology;•known and potential unknown liabilities associated with the acquired businesses, including due to litigation;•difficulties in managing, or potential write-offs of, acquired assets, and potential financial and credit risks associated with acquired customers; •negative impact to our results of operations because of the depreciation and amortization of acquired intangible assets, fixed assets and operating lease right-of-use assets;•the loss of acquired unearned revenue and unbilled unearned revenue;•difficulties in and financial costs of addressing acquired compensation structures inconsistent with our compensation structure;•additional stock-based compensation issued or assumed in connection with the acquisition, including the impact on stockholder dilution and our results of operations;•delays in customer purchases due to uncertainty related to any acquisition; •ineffective or inadequate controls, procedures and policies at the acquired company; •in the case of foreign acquisitions, challenges caused by integrating operations over distance, and across different languages, cultures and political environments; and•the tax effects of any such acquisitions including related integration and business operation changes, and assessment of the impact on the realizability of our future tax assets or liabilities.Any of these risks could harm our business or negatively impact our results of operations. In addition, to facilitate acquisitions, we may seek additional equity or debt financing, which may not be available on terms favorable to us or at all, which may affect our ability to complete subsequent acquisitions, and which may affect the risks of owning our common stock. For example, if we finance acquisitions by issuing equity or convertible or other debt securities or loans, our existing 16Table of Contentsstockholders may be diluted, or we could face constraints related to the terms of, and repayment obligation related to, the incurrence of indebtedness that could affect the market price of our common stock.Our ability to acquire other businesses or technologies, or integrate acquired businesses effectively, may be impaired by trade tensions and increased global scrutiny of foreign investments and acquisitions in the technology sector. For example, several countries, including the United States and countries in Europe and the Asia-Pacific region, are considering or have adopted restrictions of varying kinds of transactions involving foreign investments and acquisitions. Antitrust authorities in a number of countries have also reviewed acquisitions in the technology industry with increased scrutiny. Governments may continue to adopt or tighten restrictions of this nature, some of which may apply to acquisitions or integrations of businesses by us, and such restrictions or government actions could negatively impact our business and financial results.Supporting our existing and growing customer base could strain our personnel resources and infrastructure, and if we are unable to scale our operations and increase productivity, we may not be able to successfully implement our business plan.We continue to experience significant growth in our customer base, including through acquisitions, which has placed a strain on and in the future may stress the capabilities of our management, administrative, operational and financial infrastructure. We anticipate that significant additional investments, including in human capital software, will be required to scale our operations and increase productivity, to address the needs of our customers, to further develop and enhance our services, to expand into new geographic areas and to scale with our overall growth. The additional investments we are making will increase our cost base, which will make it more difficult for us to offset any future revenue shortfalls by reducing expenses in the short term. We may not be able to make these investments as quickly or effectively as necessary to successfully scale our operations.We regularly upgrade or replace our various software systems and processes. If the implementations of these new applications are delayed, or if we encounter unforeseen problems with our new systems and processes or in migrating away from our existing systems and processes, our operations and our ability to manage our business could be negatively impacted. For example, our efforts to further automate our processes for customer contracts may be complicated by unanticipated operating difficulties.Our success will depend in part upon the ability of our senior management to manage our projected growth effectively. To do so, we must continue to increase the productivity of our existing employees and to hire, train and manage new employees as needed. Additionally, changes in our work environment and workforce in the wake of the COVID-19 pandemic, including our return to office and remote work policies, may not meet the needs and expectations of our workforce or may create operational and workplace culture challenges, which could negatively impact our ability to increase employee productivity or attract and retain our employees and could adversely affect our operations. Further, reductions in our real estate portfolio resulting from our Restructuring Plan may impede our ability to adequately accommodate employees returning to the office or future headcount growth. To manage the expected domestic and international growth of our operations and personnel, we will need to continue to improve our operational, financial and management controls, our reporting systems and procedures and our utilization of real estate. If we fail to successfully scale our operations and increase productivity, we may be unable to execute our business plan and the value of our common stock could decline.If our customers do not renew their subscriptions for our services or if they reduce the number of paying subscriptions at the time of renewal, our revenue and current remaining performance obligation could decline and our business may suffer. If we cannot accurately predict subscription renewals or upgrade rates, we may not meet our revenue targets, which may adversely affect the market price of our common stock. Our customers have no obligation to renew their subscriptions for our services after the expiration of their contractual subscription period, which is typically 12 to 36 months, and in the normal course of business, some customers have elected not to renew. In addition, our customers may renew for fewer subscriptions, renew for shorter contract lengths or switch to lower cost offerings of our services, particularly in times of general economic uncertainty. Additionally, due to our largely subscription-based business model, the long-term impact of the COVID-19 pandemic and recent economic uncertainty may not be fully reflected in our results of operations until future periods. It is difficult to predict attrition rates given our varied customer base and the number of multi-year subscription contracts. Our attrition rates may increase or fluctuate as a result of various factors, including customer dissatisfaction with our services, customers’ spending levels, mix of customer base, decreases in the number of users at our customers, competition, pricing increases or changes and deteriorating general economic conditions. Our future success also depends in part on our ability to sell additional features and services, more subscriptions or enhanced editions of our services to our current customers. This may also require increasingly sophisticated and costly sales efforts that are targeted at senior management. Similarly, the rate at which our customers purchase new or enhanced services depends on a number of factors, including general economic conditions and customer receptiveness to any price changes related to these additional features and services.17Table of ContentsIf customers do not renew their subscriptions, do not purchase additional features or enhanced subscriptions or if attrition rates increase, we may not meet our revenue targets and our business could be harmed, which may adversely affect the market price of our common stock.Periodic changes to our sales organization can be disruptive and may reduce our rate of growth.We periodically change and make adjustments to our sales organization in response to market opportunities, competitive threats, management changes, product introductions or enhancements, acquisitions, sales performance, increases in sales headcount, cost levels and other internal and external considerations. Such sales organization changes have in some periods resulted in, and may in the future result in, a reduction of productivity, which could negatively impact our rate of growth in the current and future quarters and operating results, including revenue. For example, the Restructuring Plan involved such changes to our sales organization, which could negatively impact our productivity, growth rate and operating results, which may adversely affect the market price of our common stock. In addition, any significant change to the way we structure our compensation of our sales organization may be disruptive and may affect our revenue growth. Our ability to deliver our services is dependent on the development and maintenance of the infrastructure of the Internet by third parties.The Internet’s infrastructure comprises many different networks and services that are highly fragmented and distributed by design. This infrastructure is run by a series of independent third-party organizations that work together to provide the infrastructure and supporting services of the Internet under the governance of the Internet Corporation for Assigned Numbers and Names (“ICANN”) and the Internet Assigned Numbers Authority, now under the stewardship of ICANN. The Internet has experienced a variety of outages and other delays as a result of damages to portions of its infrastructure, denial-of-service attacks or related cyber incidents, and it could face outages and delays in the future, potentially reducing the availability of the Internet to us or our customers for delivery of our services. Any resulting interruptions in our services or the ability of our customers to access our services could result in a loss of potential or existing customers and harm our business.In addition, certain countries have implemented, or may implement, legislative and technological actions that either do or can effectively regulate access to the Internet, including the ability of Internet service providers to limit access to specific websites or content. Other countries have attempted, are attempting or may attempt to change or limit the legal protections available to businesses that depend on the Internet for the delivery of their services. These actions could potentially limit or interrupt access to our services from certain countries or Internet service providers, increase our risk or add liabilities, impede our growth, productivity and operational effectiveness, result in the loss of potential or existing customers and harm our business.Sales to customers outside the United States expose us to risks inherent in international operations.We sell our services throughout the world and are subject to risks and challenges associated with international business. We intend to seek to continue to expand our international sales efforts. The risks and challenges associated with sales to customers outside the United States or those that can affect international operations generally, include:•regional economic and political conditions, natural disasters, acts of war, terrorism and actual or threatened public health emergencies; •localization of our services, including translation into foreign languages and associated expenses;•regulatory frameworks or business practices favoring local competitors;•pressure on the creditworthiness of sovereign nations, where we have customers and a balance of our cash, cash equivalents and marketable securities;•foreign currency fluctuations and controls, which may make our services more expensive for international customers and could add volatility to or negatively impact our operating results, including, for example, the impact of Argentina’s 2023 amendments to foreign exchange controls;•compliance with multiple, conflicting, ambiguous or evolving governmental laws and regulations, including employment, tax, privacy, anti-corruption, import/export, customs, anti-boycott, sanctions and embargoes, antitrust, data privacy, transfer, storage and protection, cybersecurity, ESG and industry-specific laws and regulations, including rules related to compliance by our third-party resellers and our ability to identify and respond timely to compliance issues when they occur;•liquidity issues or political actions by sovereign nations, including nations with a controlled currency environment, could result in decreased values of these balances or potential difficulties protecting our foreign assets or satisfying local obligations;•vetting and monitoring our third-party resellers in new and evolving markets to confirm they maintain standards consistent with our brand and reputation;18Table of Contents•treatment of revenue from international sources, evolving domestic and international tax environments and changes to tax codes, including being subject to foreign tax laws and being liable for paying withholding taxes in foreign jurisdictions;•uncertainty regarding the imposition of and changes in the United States’ and other governments’ trade regulations, trade wars, tariffs, other restrictions or other geopolitical events, including the evolving relations between the United States and China, the United States and Russia, and ongoing conflicts, such as the war in Ukraine and the Israel-Hamas war;•changes in the public perception of governments in the regions where we operate or plan to operate;•regional data privacy laws and other regulatory requirements that apply to outsourced service providers and to the transmission of our customers’ data across international borders, which grow more complex as we scale, expand into new markets and enhance the breadth of our service offerings;•different pricing environments;•difficulties in staffing and managing foreign operations;•different or lesser protection of our intellectual property, including increased risk of theft of our proprietary technology and other intellectual property, and more prevalent cybersecurity risks, particularly in jurisdictions in which we have historically chosen not to operate; and•longer accounts receivable payment cycles and other collection difficulties.Any of these factors could negatively impact our business and results of operations. The above factors may also negatively impact our ability to successfully expand into emerging market countries, where we have little or no operating experience, where it can be costly and challenging to establish and maintain operations, including hiring and managing required personnel, and difficult to promote our brand, and where we may not benefit from any first-to-market advantage or otherwise succeed.As more of our sales efforts are targeted at larger enterprise customers, our sales cycle may become more time-consuming and expensive, we may encounter pricing pressure and implementation and configuration challenges, and we may have to delay revenue recognition for some complex transactions, all of which could harm our business and operating results.As we target more of our sales efforts at larger enterprise customers, including governmental entities, and specific industries, such as financial services and healthcare and life sciences, we may face greater costs, longer sales cycles, greater competition and less predictability in completing some of our sales. In these market segments, the customer’s decision to use our services is often an enterprise-wide decision and, if so, may require us to provide greater levels of education regarding the use and benefits of our services, as well as addressing concerns regarding privacy and data protection laws and regulations of prospective customers with international operations or whose own customers operate internationally.In addition, larger customers and governmental entities often demand more configuration, integration services and features. As a result of these factors, these sales opportunities often require us to devote greater sales support and professional services resources to individual customers, driving up costs and time required to complete sales and diverting our own sales and professional services resources to a smaller number of larger transactions, while potentially requiring us to delay revenue recognition on some of these transactions until the technical or implementation requirements have been met.Pricing and packaging strategies for enterprise and other customers for subscriptions to our existing and future service offerings, including for our AI offerings, may not be widely accepted by new or existing customers. Our adoption of or failure to adopt, as well as the manner and time of, changes to our pricing and packaging models and strategies may harm our business.We may lose key members of our management team or development and operations personnel, and may be unable to attract and retain employees we need to support our operations and growth.Our success depends substantially upon the continued services of our executive officers and other key members of management, particularly our chief executive officer. From time to time, there may be changes in our management team resulting from the hiring, departure or realignment of executives. Such changes may be disruptive to our business. We are also substantially dependent on the continued service of our existing development and operations personnel because of the complexity of our services and technologies. Our executive officers, key management, development or operations personnel could terminate their employment with us at any time. Effective succession planning for management is important to our long-term success. If we do not develop adequate succession planning for our key personnel, the loss of one or more of our key employees or groups of employees could seriously harm our business. The technology industry is subject to substantial and continuous competition for engineers with high levels of experience in designing, developing and managing software and technology services, as well as competition for sales executives, data scientists and operations personnel. We have experienced, and currently experience, challenges with significant competition in 19Table of Contentstalent recruitment and retention, and may not in the future be successful in recruiting or retaining talent or achieving the workforce diversity goals we have set publicly. We have from time to time experienced, and we expect to continue to experience, difficulty in hiring, developing, integrating and retaining highly skilled employees with appropriate qualifications. These difficulties may be amplified by evolving restrictions on immigration, travel, or availability of visas for skilled technology workers. Additionally, our compensation arrangements and benefits may not always be successful in attracting new employees or retaining and motivating our existing personnel. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects could be severely harmed. In January 2023, we announced the Restructuring Plan, which was intended to reduce operating costs, improve operating margins and continue advancing our ongoing commitment to profitable growth. The Restructuring Plan included a reduction of our workforce, which was substantially completed by the end of fiscal 2024, and select real estate exits and office space reductions within certain markets, which are expected to be completed by the end of fiscal 2026. In the fourth quarter of fiscal 2024, we initiated and substantially completed a further reduction of less than one percent of our workforce. The Restructuring Plan and recent workforce reduction, or any similar actions taken in the future, could negatively impact our ability to attract, integrate, retain and motivate key employees.In addition, we believe in the importance of our corporate culture, which fosters dialogue, collaboration, recognition, equality and a sense of family. As our organization has grown and expanded globally, and as our workplace plans have developed, including, for example, workforce and office space reductions enacted under the Restructuring Plan, we have in the past and may in the future find it increasingly difficult to maintain the beneficial aspects of our corporate culture globally, including managing the complexities of communicating with all employees. Any inability to maintain our corporate culture could negatively impact our ability to attract and retain employees, harm our reputation with customers, or negatively impact our future growth.Any failure in the delivery of high-quality professional and technical support services related to our online applications may adversely affect our relationships with our customers and our financial results.Our customers sometimes require highly skilled and trained service professionals to successfully implement our applications and depend on our support organization to resolve technical issues relating to our applications. Implementation services may be performed by us, our customers, a third party, or a combination thereof. Our strategy is to work with third parties to increase the breadth of capability and depth of capacity for delivery of these services to our customers. If customers are not satisfied with the quality and timing of work by us or a third party or with the type of services or solutions delivered, we could incur additional costs to address the situation, the profitability of that work might be impaired, our revenue recognition could be impacted and the customer’s dissatisfaction with the services received could negatively impact our ability to sell our other offerings to that customer or retain existing customers. In addition, negative publicity related to our customer relationships, regardless of its accuracy, may further damage our business by affecting our ability to compete for new business with current or prospective customers. We may be unable to respond quickly enough to accommodate short-term increases in customer demand for support services across our varying and diverse offerings. In addition, our sales process is highly dependent on our applications and business reputation and on positive recommendations from our existing customers. Any failure to maintain high-quality professional and technical support services, or a market perception that we do not maintain high-quality professional and technical support services, could adversely affect our reputation, our ability to sell our service offerings to existing and prospective customers, and our business, operating results and financial position. Strategic and Industry RisksThe markets in which we participate are intensely competitive, and if we do not compete effectively, our operating results could be harmed.The market for enterprise applications and platform services is highly competitive, rapidly evolving, fragmented and subject to changing technology, low barriers to entry, shifting customer needs and frequent introductions of new products and services. Many prospective customers have invested substantial personnel and financial resources to implement and integrate their current enterprise software into their businesses and therefore may be reluctant or unwilling to migrate away from their current solution to an enterprise cloud computing application service. Additionally, third-party developers may be reluctant to build application services on our platform since they have invested in other competing technology platforms.Our current competitors include:•vendors of packaged business software, as well as companies offering enterprise apps delivered through on-premises offerings from enterprise software application vendors and cloud computing application service providers, either individually or with others;•software companies that provide their product or service free of charge as a single product or when bundled with other offerings, or only charge a premium for advanced features and functionality, as well as companies that offer solutions that are sold without a direct sales organization;20Table of Contents•vendors who offer software tailored to specific services, industries or market segments, as opposed to our full suite of service offerings, including suppliers of traditional business intelligence and data preparation products, integration software vendors, marketing vendors or e-commerce solutions vendors;•productivity tool and email providers, unified communications providers and consumer application companies that have entered the business software market; and•traditional platform development environment companies and cloud computing development platform companies who may develop toolsets and products that allow customers to build new apps that run on the customers’ current infrastructure or as hosted services, as well as would-be customers who may develop enterprise applications for internal use.In addition, we may face more competition as we expand our product offerings. Some of our current and potential competitors may have competitive advantages, such as greater name recognition, longer operating histories, more significant installed bases, broader geographic scope, broader suites of service offerings and larger marketing budgets, as well as substantially greater financial, technical, personnel and other resources. In addition, many of our current and potential competitors have established marketing relationships and access to larger customer bases, and have major distribution agreements with consultants, system integrators and resellers. We also experience competition from smaller, younger competitors that may be more agile in responding to customers’ demands and offer more targeted and simplified solutions. These competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements, or provide competitive pricing, more flexible contracts or faster implementations. As a result, even if our services are more effective than the products and services that our competitors offer, potential customers might select competitive products and services in lieu of purchasing our services. For all of these reasons, we may not be able to compete successfully against our current and future competitors, which could negatively impact our future sales and harm our business.Our efforts to expand our service offerings and to develop and integrate our existing services in order to keep pace with technological developments may not succeed and may reduce our revenue growth rate and harm our business.We derive a significant portion of our revenue from subscriptions to our CRM enterprise cloud computing application services, and we expect this will continue for the foreseeable future. Our efforts to expand our current service offerings may not succeed and may reduce our revenue growth rate. In addition, the markets for certain of our offerings, including our AI offerings, remain relatively new and it is uncertain whether our efforts, and related investments, will ever result in significant revenue for us. Further, the introduction of significant platform changes and upgrades may not result in long term revenue growth. In July 2021, we completed our acquisition of Slack, our largest acquisition to date. Slack is a relatively new category of business technology in a rapidly evolving market for software, programs and tools used by knowledge workers. We may not succeed in enhancing and improving the features, integrations and capabilities of Slack, or effectively introduce compelling new features, integrations and capabilities that reflect or anticipate the changing nature of the market which may result in an inability to attract new users and organizations and increase revenue from existing paid customers. If we are unable to develop enhancements to, and new features for, our existing or new services that keep pace with rapid technological developments, our business could be harmed. For example, we may be required to continuously enhance our AI offerings to improve the quality of content provided to our customers. The success of enhancements, new features and services depends on several factors, including the timely completion, introduction and market acceptance of the feature, service or enhancement by customers, administrators and developers, as well as our ability to integrate all of our product and service offerings and develop adequate selling capabilities in new markets. Failure in this regard may significantly impair our revenue growth as well as negatively impact our operating results if the additional costs are not offset by additional revenues. In addition, because our services are designed to operate over various network technologies and on a variety of mobile devices, operating systems and computer hardware and software platforms using a standard browser, we will need to continuously modify and enhance our services to keep pace with changes in hardware, software, communication, browser, app development platform and database technologies, as well as continue to maintain and support our services on legacy systems. We may not be successful in either developing these modifications and enhancements or in bringing them to market timely.Additionally, if we fail to anticipate or identify significant technology trends and developments early enough, or if we do not devote appropriate resources to adapting to such trends and developments, our business could be harmed. Uncertainties about the timing and nature of new network platforms or technologies, modifications to existing platforms or technologies, including text messaging capabilities, or changes in customer usage patterns thereof could increase our research and development or service delivery expenses or lead to our increased reliance on certain vendors. Any failure of our services to operate effectively with future network platforms and technologies could reduce the demand for our services, result in customer dissatisfaction and harm our business. Our continued success depends on our ability to maintain and enhance our brands.21Table of ContentsWe believe that the brand identities we have developed, including associations with trust, customer success, innovation, equality and sustainability have significantly contributed to the success of our business. Maintaining and enhancing the Salesforce brand and our other brands is critical to expanding our base of customers, partners and employees. Our brand strength, particularly for our core services, depends largely on our ability to remain a technology leader and to continue to provide high-quality innovative products, services and features in a secure, reliable manner that enhances our customers’ success even as we scale and expand our services. In order to maintain and enhance the strength of our brands, we have made and may in the future make substantial investments to expand or improve our product offerings and services, or we may enter new markets that may be accompanied by initial complications or ultimately prove to be unsuccessful. In addition, we have secured the naming rights to facilities controlled by third parties, such as office towers and a transit center, and any negative events or publicity arising in connection with these facilities could adversely impact our brand.Further, entry into markets with weaker protection of brands or changes in the legal systems in countries we operate may impact our ability to protect our brands. If we fail to maintain, enhance or protect our brands, or if we incur excessive expenses in our efforts to do so, our business, operating results and financial condition may be materially and adversely affected. We are subject to risks associated with our strategic investments, including partial or complete loss of invested capital. Significant changes in the fair value of this portfolio, including changes in the valuation of our investments in publicly traded and privately held companies, could negatively impact our financial results. We manage a portfolio of strategic investments in both privately held and publicly traded companies focused primarily on enterprise cloud companies, technology startups and system integrators. While we invest in companies that we believe are digitally transforming their industries, improving customer experiences, helping us expand our solution ecosystem or supporting other corporate initiatives, we may still experience unforeseen brand or reputational harm associated with our investments. We may also experience challenges from regulatory authorities in connection with our investments, including from antitrust authorities who are increasingly scrutinizing technology investments, and which may lead to unforeseen expenditures or which may block, delay or impose undesirable conditions on transactions involving our investment portfolio. Our investments range from early to late stage companies, including investments made concurrent with a company’s initial public offering. Investments in early stage companies are inherently speculative, as these companies may not yet be revenue-generating and could still be in the process of developing their products and services at the time of our investment. The financial success of our investment in any company is typically dependent on a liquidity event, such as a public offering, acquisition or other favorable market event reflecting appreciation to the cost of our initial investment. In certain cases, our ability to sell these investments may be impacted by contractual obligations to hold the securities for a set period of time after a public offering. All of our investments are subject to a risk of partial or total loss of invested capital.We anticipate future volatility in our consolidated statements of operations due to changes in market prices, observable price changes and impairments of our strategic investments. The resulting gains or losses could be material depending on market conditions and events, particularly in periods with economic uncertainty, inflation, geopolitical conflict, volatile public equity markets or unsettled global market conditions.If third-party developers and providers do not continue to embrace our technology delivery model and enterprise cloud computing services, or if our customers seek warranties from us for third-party applications, integrations, data and content, our business could be harmed.Our success depends on the willingness of a growing community of third-party developers and technology providers to build applications and provide integrations, data and content that are complementary to our services. Without the continued development of these applications and provision of such integrations, data and content, both current and potential customers may not find our services sufficiently attractive, which could impact future sales. In addition, for those customers who authorize a third-party technology partner to access their data, we do not provide any warranty related to the functionality, security or integrity of the data access, transmission or processing. Despite contract provisions to protect us, customers may look to us to support and provide warranties for the third-party applications, integrations, data and content, even though not developed or sold by us, which may expose us to potential claims, liabilities and obligations, all of which could harm our reputation and our business.Social and ethical issues, including the use or capabilities of AI in our offerings, may result in reputational harm and liability.Policies we adopt or choose not to adopt on social and ethical issues, especially regarding the use of our products, may be unpopular with some of our employees or with our customers or potential customers, and have in the past impacted and may in the future impact our ability to attract or retain employees and customers. We also may choose not to conduct business with potential customers or discontinue or not expand business with existing customers due to these policies. Further, actions taken by our customers and employees, including through the use or misuse of our products or new technologies for illegal activities or improper information sharing, may result in reputational harm or possible liability, particularly in light of upcoming regulatory requirements like the Digital Services Act (“DSA”) from the EU. For example, we have been subject to allegations 22Table of Contentsin legal proceedings that we should be liable for the use of certain of our products by third parties. Although we believe that we have a strong defense against these allegations, legal proceedings can be lengthy, expensive and disruptive to our operations and the outcome of any claims or litigation, regardless of the merits, is inherently uncertain. Regardless of outcome, these types of claims could cause reputational harm to our brand or result in liability. We are increasingly building AI into many of our offerings, including generative AI. As with many innovations, AI and our Customer 360 platform present additional risks and challenges that could affect their adoption and therefore our business. For example, the development of AI and Customer 360, the latter of which provides information regarding our customers’ customers, presents emerging ethical issues. If we enable or offer solutions that draw controversy due to their perceived or actual impact on human rights, privacy, employment, or in other social contexts, we may experience new or enhanced governmental or regulatory scrutiny, brand or reputational harm, competitive harm or legal liability. Data practices by us or others that result in controversy could also impair the acceptance of AI solutions. This in turn could undermine confidence in the decisions, predictions, analysis or other content that our AI applications produce, subjecting us to competitive harm, legal liability and brand or reputational harm. The rapid evolution of AI will require the application of resources to develop, test and maintain our products and services to help ensure that AI is implemented ethically in order to minimize unintended, harmful impact. Uncertainty around new and emerging AI applications such as generative AI content creation will require additional investment in the licensing or development of proprietary datasets, machine learning models and systems to test for accuracy, bias and other variables, which are often complex, may be costly and could impact our profit margin. Moreover, the move from AI content classification to AI content generation through our development of Einstein GPT and other generative AI products brings additional risks and responsibility. Known risks of generative AI currently include risks related to accuracy, bias, toxicity, privacy and security and data provenance. For example, AI technologies, including generative AI, may create content that appears correct but is factually inaccurate or flawed, or contains copyrighted or other protected material, and if our customers or others use this flawed content to their detriment, we may be exposed to brand or reputational harm, competitive harm and/or legal liability. Developing, testing and deploying AI systems may also increase the cost profile of our offerings due to the nature of the computing costs involved in such systems. If we are unable to mitigate these risks, or if we incur excessive expenses in our efforts to do so, our reputation, business, operating results and financial condition may be harmed. Our aspirations and disclosures related to ESG matters expose us to risks that could adversely affect our reputation and performance.We have established and publicly announced ESG goals, including our commitments to advancing racial and gender equality within our workforce and reducing greenhouse gas emissions. These statements reflect our current plans and aspirations and are not guarantees that we will be able to achieve them. Our failure to accomplish or accurately track and report on these goals on a timely basis, or at all, could adversely affect our reputation, financial performance and growth, and expose us to increased scrutiny from the investment community as well as enforcement authorities.Our ability to achieve any ESG objective is subject to numerous risks, many of which are outside of our control. Examples of such risks include:•the availability and cost of low- or non-carbon-based energy sources;•the evolving regulatory requirements affecting ESG practices and/or disclosures;•the availability of suppliers that can meet our sustainability, diversity and other ESG standards;•our ability to recruit, develop and retain diverse talent in our labor markets; and •the success of our organic growth and acquisitions, dispositions or restructuring of our businesses or operations.Standards for tracking and reporting ESG matters continue to evolve. Our use of disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others. This may result in a lack of consistent or meaningful comparative data from period to period or between Salesforce and other companies in the same industry. In addition, our processes and controls may not comply with evolving standards for identifying, measuring and reporting ESG metrics, including ESG-related disclosures that may be required of public companies by the SEC and other regulators, and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.If our ESG practices do not meet evolving investor or other stakeholder expectations and standards, then our reputation, our ability to attract or retain employees, and our attractiveness as an investment, business partner, acquiror or service provider could be negatively impacted. Further, our failure or perceived failure to pursue or fulfill our goals and objectives or to satisfy various reporting standards on a timely basis, or at all, could have similar negative impacts or expose us to government enforcement actions and private litigation. For example, the state of California has adopted new climate change disclosure requirements, and compliance with such rules could require significant effort and resources and result in changes to our current ESG goals. Legal and Regulatory Risks23Table of ContentsPrivacy concerns and laws as well as evolving regulation of cloud computing, AI services, cross-border data transfer restrictions and other domestic or foreign regulations may limit the use and adoption of our services and adversely affect our business.Regulation related to the provision of services over the Internet is evolving, as federal, state and foreign governments continue to adopt new, or modify existing, laws and regulations addressing data privacy, cybersecurity, data protection, data sovereignty and the collection, processing, storage, hosting, transfer and use of data, generally. In some cases, data privacy laws and regulations, such as the EU’s General Data Protection Regulation (“GDPR”), impose obligations directly on Salesforce as both a data controller and a data processor, as well as on many of our customers. In addition, domestic data privacy laws, such as the California Consumer Privacy Act (“CCPA”) as amended by the California Privacy Rights Act (“CPRA”), and laws that have recently passed and/or gone into effect in many other states similarly impose new obligations on us and many of our customers, potentially as both businesses and service providers. These laws continue to evolve, including most recently with India’s Digital Personal Data Protection Act 2023, and as various jurisdictions introduce similar proposals, we and our customers could be exposed to additional regulatory burdens. The introduction of numerous new pieces of EU legislation related to the use of data, including in the DSA, the Data Act and AI Act, may impose additional rules and restrictions on the use of the data in our products and services. In addition, various safe harbors have historically been provided to those who hosted content provided by others, such as safe harbors from monetary damages for copyright infringement arising from copyrighted content provided by customers and others and for defamation and other torts arising from information provided by customers and others. There is an increasing demand for repealing or limiting these safe harbors by either judicial decision or legislation, and we have active legal proceedings that have been impacted by the repeal or limiting of safe harbors that were previously available to us. Loss of these safe harbors may require altering or limiting some of our services or may require additional contractual terms to avoid liabilities for our customers’ misconduct.Although we monitor the regulatory, judicial and legislative environment and have invested in addressing these developments, these laws may require us to make additional changes to our practices and services to enable us or our customers to meet the new legal requirements, and may also increase our potential liability exposure through new or higher potential penalties for noncompliance, including as a result of penalties, fines and lawsuits related to data breaches. Furthermore, privacy laws and regulations are subject to differing interpretations and may be inconsistent among jurisdictions. These and other requirements are causing increased scrutiny among customers, particularly in the public sector and highly regulated industries, and may be perceived differently from customer to customer. These developments could reduce demand for our services, require us to take on more onerous obligations in our contracts, restrict our ability to store, transfer and process data or, in some cases, impact our ability or our customers' ability to offer our services in certain locations, to deploy our solutions, to reach current and prospective customers, or to derive insights from customer data globally. For example, on July 16, 2020, the Court of Justice of the European Union (“CJEU”) invalidated the EU-U.S. Privacy Shield Framework, one of the mechanisms that allowed companies, including Salesforce, to transfer personal data from the European Economic Area (“EEA”) to the United States. Even though the CJEU decision upheld the Standard Contractual Clauses (“SCCs”) as an adequate transfer mechanism, the decision created uncertainty around the validity of all EU-to-U.S. data transfers. While the EU and U.S. governments have recently adopted the EU-U.S. Data Privacy Framework to foster EU-to-U.S. data transfers and address the concerns raised in the aforementioned CJEU decision, it is uncertain whether this framework will be overturned in court like the previous two EU-U.S. bilateral cross-border transfer frameworks. As a result, regulators may continue to be inclined to interpret the CJEU’s decision, and the logic behind it, as significantly restricting certain cross-border transfers and the cost and complexity of providing our services in certain markets may increase. Certain countries outside of the EEA have also passed or are considering passing laws requiring varying degrees of local data residency. By way of further example, statutory damages available through a private right of action for certain data breaches under the CPRA and potentially other states’ laws, may increase our and our customers’ potential liability and the demands our customers place on us.The costs of compliance with, and other burdens imposed by, privacy laws, regulations and standards may limit the use and adoption of our services, reduce overall demand for our services, make it more difficult to meet expectations from our commitments to customers and our customers’ customers, lead to significant fines, penalties or liabilities for noncompliance, impact our reputation, or slow the pace at which we close sales transactions, in particular where customers request specific warranties and unlimited indemnity for noncompliance with privacy laws, any of which could harm our business. In March 2023, Salesforce launched the Hyperforce EU Operating Zone, which is designed to enable storage and processing of customer data solely within the EU. This EU service may enhance our ability to attract and retain customers operating in the EU, but may also increase the cost and complexity of supporting those customers, and our customers may request similar offerings in other territories.In addition to government activity, privacy advocates and other industry groups have established or may establish new self-regulatory standards that may place additional burdens on our ability to provide our services globally. Our customers expect us to meet voluntary certification and other standards established by third parties. If we are unable to maintain these certifications or meet these standards, it could adversely affect our ability to provide our solutions to certain customers and 24Table of Contentscould harm our business. In addition, we have seen a trend toward the private enforcement of data protection obligations, including through private actions for alleged noncompliance, which could harm our business and negatively impact our reputation. For example, in 2020 we were made a party to a legal proceeding brought by a Dutch privacy advocacy group (the Privacy Collective) on behalf of certain Dutch citizens that claims we violated the GDPR and Dutch Telecommunications Act through the processing and sharing of data in connection with our Audience Studio and Data Studio products. In December 2021, the Amsterdam District Court declared the Privacy Collective’s claims against us inadmissible and dismissed the case, however, this ruling was appealed by the Privacy Collective. The appeal hearing took place in the Amsterdam Court of Appeal on February 8, 2024 and we are currently awaiting judgment. We were also named as a defendant in a similar lawsuit brought in the UK, which has subsequently been dismissed. Although we believe we have a strong defense for these claims, these or similar future claims could cause reputational harm to our brand or result in liability. In addition, a shift in consumers’ data privacy expectations or other social, economic or political developments could impact the regulatory enforcement of privacy regulations, which could require our cooperation and increase the cost of compliance with the imposed regulations. Furthermore, the uncertain and shifting regulatory environment and trust climate may raise concerns regarding data privacy and cybersecurity, which may cause our customers or our customers’ customers to resist providing the data necessary to allow our customers to use our services effectively. In addition, new products we develop or acquire in connection with changing events may expose us to liability or regulatory risk. Even the perception that the privacy and security of personal information are not satisfactorily protected or do not meet regulatory requirements could inhibit sales of our products or services and could limit adoption of our cloud-based solutions.Industry-specific regulations and other requirements and standards are evolving and unfavorable industry-specific laws, regulations, interpretive positions or standards could harm our business.Our customers and potential customers conduct business in a variety of industries, including financial services, the public sector, healthcare and telecommunications. Regulators in certain industries have adopted and may in the future adopt regulations or interpretive positions regarding the use of cloud computing, AI services and other outsourced services. The costs of compliance with, and other burdens imposed by, industry-specific laws, regulations and interpretive positions may limit our customers’ use and adoption of our services and reduce overall demand for our services. Compliance with these regulations may also require us to devote greater resources to support certain customers, which may increase costs and lengthen sales cycles. For example, some financial services regulators have imposed guidelines for use of cloud computing services that mandate specific controls or require financial services enterprises to obtain regulatory approval prior to outsourcing certain functions. In the United States, a cybersecurity Executive Order released in May 2021 may heighten future compliance and incident reporting standards in order to obtain certain public sector contracts. If we are unable to comply with these guidelines or controls, or if our customers are unable to obtain regulatory approval to use our services where required, our business may be harmed. In addition, an inability to satisfy the standards of certain voluntary third-party certification bodies that our customers may expect, such as an attestation of compliance with the Payment Card Industry Data Security Standards, may have an adverse impact on our business and results. If in the future we are unable to achieve or maintain industry-specific certifications or other requirements or standards relevant to our customers, it may harm our business and adversely affect our results.Further, in some cases, industry-specific, regionally-specific or product-specific laws, regulations or interpretive positions may impact our ability, as well as the ability of our customers, partners and data providers, to collect, augment, analyze, use, transfer and share personal and other information that is integral to certain services we provide. The interpretation of many of these statutes, regulations and rulings is evolving in the courts and administrative agencies and an inability to comply may have an adverse impact on our business and results. This impact may be particularly acute in countries that have passed or are considering passing legislation that requires data to remain localized “in country,” as this may impose financial costs on companies required to store data in jurisdictions not of their choosing and to use nonstandard operational processes that add complexity and are difficult and costly to integrate with global processes. This is also true with respect to the global proliferation of laws regulating the financial services industry, including its use of cloud services. In Europe, the Digital Operational Resilience Act (DORA), which aims to ensure the resilience of the EU financial sectors, including through mandatory risk management, incident reporting, resilience testing and third-party outsourcing restrictions, was formally adopted by the Council of the EU in November 2022. The UK is advancing similar legislation and other countries may follow. Further, countries are applying their data and consumer protection laws to AI, and particularly generative AI, and/or are considering legal frameworks on AI. Any failure or perceived failure by Salesforce to comply with such requirements could have an adverse impact on our business.There are various statutes, regulations and rulings relevant to direct email marketing and text-messaging industries, including the Telephone Consumer Protection Act (“TCPA”) and related Federal Communication Commission orders, which impose significant restrictions on the ability to utilize telephone calls and text messages to mobile telephone numbers as a means of communication, when the prior consent of the person being contacted has not been obtained. We have been, and may in the future be, subject to one or more class-action lawsuits, as well as individual lawsuits, containing allegations that one of our businesses or customers violated the TCPA. A determination that we or our customers violated the TCPA or other 25Table of Contentscommunications-based statutes could expose us to significant damage awards that could, individually or in the aggregate, materially harm our business. In addition, many jurisdictions across the world are currently considering, or have already begun implementing, changes to antitrust and competition laws, regulations or interpretative positions to enhance competition in digital markets and address practices by certain digital platforms that they perceive to be anticompetitive. These regulatory efforts could result in laws, regulations or interpretative positions that may require us to change certain of our business practices, undertake new compliance obligations or otherwise may have an adverse impact on our business and results. We have been and may in the future be sued by third parties for various claims, including alleged infringement of proprietary rights.We are involved in various legal matters arising from the normal course of business activities. These include claims, suits, government investigations and other proceedings involving alleged infringement of third-party patents and other intellectual property rights, as well as commercial, corporate and securities, labor and employment, class actions, wage and hour, antitrust, data privacy, cybersecurity and other matters.The software and Internet industries are characterized by the existence of many patents, trademarks, trade secrets and copyrights and by frequent litigation based on allegations of infringement or other violations of intellectual property rights. We have received in the past and may receive in the future communications from third parties, including practicing entities and non-practicing entities, claiming that we have infringed their intellectual property rights. We have also been, and may in the future be, sued by third parties for alleged infringement of their claimed proprietary rights. Our technologies may be subject to injunction if they are found to infringe the rights of a third party or we may be required to pay damages, or both. Further, many of our subscription agreements require us to indemnify our customers for third-party intellectual property infringement claims, which would increase the cost to us of an adverse ruling on such a claim.In addition, we have in the past been, and may in the future be, sued by third parties who seek to target us for actions taken by our customers, including through the use or misuse of our products. For example, we have been subject to allegations in legal proceedings that we should be liable for the use of certain of our products by third parties. Although we believe we have a strong defense for these claims, such claims could cause reputational harm to our brand or result in liability. Our exposure to risks associated with various claims, including claims related to the use of intellectual property as well as securities and related stockholder derivative claims, may be increased as a result of acquisitions of other companies. For example, we are subject to ongoing securities class action litigation and related stockholder derivative claims brought against Slack that remain outstanding, and as to which we may ultimately be subject to liability or settlement costs. Additionally, we may have a lower level of visibility into the development process with respect to intellectual property or the care taken to safeguard against infringement risks with respect to acquired companies or technologies. In addition, third parties have made claims in connection with our acquisitions and may do so in the future, and they may also make infringement and similar or related claims after we have acquired technology that had not been asserted prior to our acquisition.The outcome of any claims or litigation, regardless of the merits, is inherently uncertain. Any claims or lawsuits, and the disposition of such claims and lawsuits, whether through settlement or licensing discussions, or litigation, could be time-consuming and expensive to resolve, divert management attention from executing our business plan, result in efforts to enjoin our activities, lead to attempts on the part of other parties to pursue similar claims and, in the case of intellectual property claims, require us to change our technology, change our business practices, pay monetary damages or enter into short- or long-term royalty or licensing agreements.Any adverse determination or settlement related to intellectual property claims or other litigation could prevent us from offering our services to others, could be material to our financial condition or cash flows, or both, or could otherwise adversely affect our operating results, including our operating cash flow in a particular period. In addition, depending on the nature and timing of any such dispute, an unfavorable resolution of a legal matter could materially affect our current or future results of operations or cash flows in a particular period.Any failure to obtain registration or protection of our intellectual property rights could impair our ability to protect our proprietary technology and our brand, causing us to incur significant expenses and harm our business.If we fail to protect our intellectual property rights adequately, our competitors may gain access to our technology, affecting our brand, causing us to incur significant expenses and harming our business. Any of our patents, trademarks or other intellectual property rights may be challenged by others or invalidated through administrative process or litigation. While we have many U.S. patents and pending U.S. and international patent applications, we may be unable to obtain patent protection for the technology covered in our patent applications or the patent protection may not be obtained quickly enough to meet our business needs. In addition, our existing patents and any patents issued in the future may not provide us with competitive advantages, or may be successfully challenged by third parties. Similar uncertainty applies to our U.S. and international trademark registrations and applications. Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain, and we also may face proposals to change the scope of protection for some intellectual property rights in the U.S. and elsewhere. Additionally, the intellectual property ownership and license rights, 26Table of Contentsincluding copyright, surrounding AI technologies, which we are increasingly building into our product offerings, has not been fully addressed by U.S. courts or other federal or state laws or regulations, and the use or adoption of AI technologies in our products and services may expose us to copyright infringement or other intellectual property misappropriation claims. Effective patent, trademark, copyright and trade secret protection may not be available to us in every country in which our services are available and legal changes and uncertainty in various countries’ intellectual property regimes may result in making conduct that we believe is lawful to be deemed violative of others’ rights. The laws of some foreign countries may not be as protective of intellectual property rights as those in the U.S., and mechanisms for enforcement of intellectual property rights may be inadequate. Also, our involvement in standard-setting activity, our contribution to open source projects, various competition law regimes or the need to obtain licenses from others may require us to license our intellectual property in certain circumstances. Accordingly, despite our efforts, we may be unable to prevent third parties from using our intellectual property.We may be required to spend significant resources and expense to monitor and protect our intellectual property rights. We may initiate claims or litigation against third parties for infringement of our proprietary rights or to establish the validity of our proprietary rights. If we fail to protect our intellectual property rights, it could impact our ability to protect our technology and brand. Furthermore, any litigation, whether or not it is resolved in our favor, could result in significant expense to us, cause us to divert time and resources from our core business, and harm our business.We may be subject to risks related to government contracts and related procurement regulations.Our contracts with federal, state, local and foreign government entities are subject to various procurement regulations and other requirements relating to their formation, administration and performance. We are from time to time subject to audits and investigations relating to our government contracts, and any violations could result in various civil and criminal penalties and administrative sanctions, including termination of contracts, refunding or suspending of payments, forfeiture of profits, payment of fines and suspension or debarment from future government business. In addition, such contracts may provide for termination by the government at any time, without cause. Any of these risks related to contracting with governmental entities could adversely impact our future sales and operating results.We are subject to governmental sanctions and export and import controls that could impair our ability to compete in international markets and may subject us to liability if we are not in full compliance with applicable laws. Our solutions are subject to export and import controls where we conduct our business activities, including the U.S. Commerce Department’s Export Administration Regulations, U.S. Customs regulations, U.S. supply chain regulations and various economic and trade sanctions regulations established by the U.S. Treasury Department’s Office of Foreign Assets Control. If we fail to comply with applicable trade laws, we and certain of our employees could be subject to substantial civil or criminal penalties, including the possible loss of trade privileges; fines, which may be imposed on us and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managers. Obtaining necessary authorizations, including any required licenses, may be time-consuming, requires expenditure of corporate resources, is not guaranteed, and may result in the delay or loss of sales opportunities or the ability to realize value from certain acquisitions or engagements. Acquisitions may also subject us to successor liability and other integration compliance risks. Furthermore, export control laws and economic sanctions may prohibit or limit the transfer of certain products and services to embargoed or sanctioned countries, governments and parties. We can provide no assurance that any of the precautions we take to prevent our solutions from being provisioned or provided to sanctions targets in violation of applicable regulations will be effective, and, accordingly, our solutions could be provisioned or provided to those targets, including by our resellers or other third parties, which could have negative consequences for our business, including government investigations, penalties and reputational harm. Changes in our solutions or trade regulations may create delays in the introduction, sale and deployment of our solutions in international markets or prevent the export or import of our solutions to certain countries, governments or persons altogether. Any decreased use of our solutions or limitation on our ability to export or sell our solutions may adversely affect our business, financial condition and results of operations. Import and export control regulations in the United States and other countries are subject to change and uncertainty, including as a result of geopolitical developments and relations between the United States and China, the United States and Russia, war in Ukraine and the Israel-Hamas war. Regulators in the United States and elsewhere have signaled an increased emphasis on sanctions and export control enforcement, including several recent high-profile enforcement actions and increased pressure for companies to self-disclose potential violations.Financial RisksBecause we generally recognize revenue from subscriptions for our services over the term of the subscription, downturns or upturns in new business may not be immediately reflected in our operating results.We generally recognize revenue from customers ratably over the terms of their subscription and support agreements, which are typically 12 to 36 months. As a result, most of the revenue we report in each quarter is the result of subscription and support agreements entered into during previous quarters. Consequently, a decline in new or renewed subscriptions in any one quarter may not be reflected in our revenue results for that quarter but will negatively impact our revenue in future quarters. Accordingly, the effect of significant downturns in sales and market acceptance of our services, and changes in our attrition 27Table of Contentsrate, may not be fully reflected in our results of operations until future periods. Our subscription model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from new customers must be recognized over the applicable subscription and support term.If we experience significant fluctuations in our rate of anticipated growth and fail to balance our expenses with our revenue forecasts, our business could be harmed and the market price of our common stock could decline.Due to the unpredictability of future general economic and financial market conditions, including from the global economic impact of ongoing conflicts, such as the war in Ukraine and the Israel-Hamas war, the pace of change and innovation in enterprise cloud computing services, the impact of foreign currency exchange rate fluctuations, the growing complexity of our business, including the use of multiple pricing and packaging models and the increasing amount of revenue from software license sales, and our increasing focus on enterprise cloud computing services, we may not be able to realize our projected revenue growth plans. We plan our expense and investment levels based on estimates of future revenue and future anticipated rate of growth. We may not be able to adjust our spending appropriately if the addition of new subscriptions or the renewals of existing subscriptions fall short of our expectations, and unanticipated events may cause us to incur expenses beyond what we anticipated. A portion of our expenses may also be fixed in nature for some minimum amount of time, such as with costs capitalized to obtain revenue contracts, data center and infrastructure service contracts or office leases, so it may not be possible to reduce costs in a timely manner, or at all, without the payment of fees to exit certain obligations early. Additionally, if sales through indirect channels increase, this may lead to greater difficulty in forecasting revenue and anticipated rate of growth. As a result, our revenues, operating results and cash flows may fluctuate significantly on a quarterly basis and revenue growth rates may not be sustainable and may decline in the future. If we are not able to provide continued operating margin expansion, our business could be harmed and the market price of our common stock could decline.Unanticipated changes in our effective tax rate and additional tax liabilities and global tax developments may impact our financial results.We are subject to income taxes in the United States and various other jurisdictions. Significant judgment is often required in the determination of our worldwide provision for income taxes. Our effective tax rate could be impacted by changes in our earnings and losses in countries with differing statutory tax rates, changes in operations, changes in non-deductible expenses, changes in the tax effects of stock-based compensation expense, changes in the valuation of deferred tax assets and liabilities and our ability to utilize them, the applicability of withholding taxes, effects from acquisitions and changes in accounting principles and tax laws. Any changes, ambiguity or uncertainty in taxing jurisdictions’ administrative interpretations, decisions, policies and positions could also materially impact our income tax liabilities. We may also be subject to additional tax liabilities and penalties due to changes in non-income based taxes resulting from changes in federal, state, local or international tax laws, changes in taxing jurisdictions’ administrative interpretations, decisions, policies and positions, results of tax examinations, settlements or judicial decisions, changes in accounting principles, or changes to our business operations, including as a result of acquisitions. Any resulting increase in our tax obligation or cash taxes paid could adversely affect our cash flows and financial results.We are also subject to tax examinations or engaged in alternative resolutions in multiple jurisdictions. While we regularly evaluate new information that may change our judgment resulting in recognition, derecognition or changes in measurement of a tax position taken, there can be no assurance that the final determination of any examinations will not have an adverse effect on our operating results or financial position.As our business continues to grow, increasing our brand recognition and profitability, we may be subject to increased scrutiny and corresponding tax disputes, which may impact our cash flows and financial results. Furthermore, our growing prominence may bring public attention to our tax profile, and if perceived negatively, may cause brand or reputational harm.Global tax developments applicable to multinational businesses may have a material impact to our business, cash flows, or financial results. Such developments, for example, may include certain new provisions introduced by the Inflation Reduction Act, certain Organization for Economic Co-operation and Development’s proposals including the implementation of the global minimum tax under the Pillar Two model rules, and the European Commission’s and certain major jurisdictions’ heightened interest in and taxation of companies participating in the digital economy. Furthermore, governments’ responses to macroeconomic factors and tax revenue needs may lead to tax rule changes that could materially and adversely affect our cash flows and financial results. We are exposed to fluctuations in currency exchange rates that have in the past and could in the future negatively impact our financial results and cash flows from changes in the value of the U.S. Dollar versus local currencies. We primarily conduct our business in the following regions: the Americas, Europe and Asia Pacific. The expanding global scope of our business exposes us to risk of fluctuations in foreign currency markets, including in emerging markets. This exposure is the result of selling in multiple currencies, growth in our international investments, additional headcount in foreign locations, and operating in countries where the functional currency is the local currency. Specifically, our results of operations 28Table of Contentsand cash flows are subject to currency fluctuations primarily in Euro, British Pound Sterling, Japanese Yen, Canadian Dollar, Australian Dollar, Brazilian Real and Indian Rupee against the U.S. Dollar. These exposures may change over time as business practices evolve, economic and political conditions change and evolving tax regulations come into effect. The fluctuations of currencies in which we conduct business can both increase and decrease our overall revenue and expenses for any given fiscal period. Furthermore, fluctuations in foreign currency exchange rates, combined with the seasonality of our business, could affect our ability to accurately predict our future results and earnings.Additionally, global events as well as geopolitical developments, including war in Ukraine and the Israel-Hamas war, fluctuating commodity prices, trade tariff developments and inflation have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which has and could in the future amplify the volatility of currency fluctuations. Although we attempt to mitigate some of this volatility and related risks through foreign currency hedging, our hedging activities are limited in scope and may not effectively offset the adverse financial impacts that may result from unfavorable movements in foreign currency exchange rates, which could adversely impact our financial condition or results of operations.Our debt service obligations, lease commitments and other contractual obligations may adversely affect our financial condition, results of operations and cash flows.As of January 31, 2024, we had a substantial level of outstanding debt, including our Senior Notes. We are also party to the Revolving Loan Credit Agreement, which provides for our $3.0 billion Credit Facility. Although there were no outstanding borrowings under the Credit Facility as of January 31, 2024, we may use the proceeds of future borrowings under the Credit Facility for general corporate purposes, which may include, without limitation, the consideration, fees, costs and expenses related to any acquisition.In addition to the outstanding and potential debt obligations above, we have also recorded substantial liabilities associated with noncancellable future payments on our long-term lease agreements. We also have significant other contractual commitments, including leases that have not yet commenced and commitments with infrastructure service providers, which are not reflected on our consolidated balance sheets. Maintenance of our indebtedness and contractual commitments and any additional issuances of indebtedness could:•impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate or other purposes;•cause us to dedicate a substantial portion of our cash flows from operations toward debt service obligations and principal repayments; and •make us more vulnerable to downturns in our business, our industry or the economy in general.Our ability to meet our expenses and debt obligations will depend on our future performance, which will be affected by financial, business, economic, regulatory and other factors. We will not be able to control many of these factors, such as economic conditions and governmental regulations. Further, our operations may not generate sufficient cash to enable us to service our debt or contractual obligations resulting from our leases. If we fail to make a payment on our debt, we could be in default on such debt. If we are at any time unable to generate sufficient cash flows from operations to service our indebtedness when payment is due, we may be required to attempt to renegotiate the terms of the instruments relating to the indebtedness, seek to refinance all or a portion of the indebtedness or obtain additional financing. There can be no assurance that we would be able to successfully renegotiate such terms, that any such refinancing would be possible or that any additional financing could be obtained on terms that are favorable or acceptable to us. Any new or refinanced debt may be subject to substantially higher interest rates, which could adversely affect our financial condition and impact our business. In addition, we may seek debt financing to fund future acquisitions. We can offer no assurance that we can obtain debt financing on terms acceptable to us, if at all.In addition, adverse changes by any rating agency to our credit ratings may negatively impact our reputation, the value and liquidity of both our debt and equity securities, as well as the potential costs associated with a refinancing of our debt. Downgrades in our credit ratings could also affect the terms of any such refinancing or future financing or restrict our ability to obtain additional financing in the future.The indentures governing our Senior Notes and the Revolving Loan Credit Agreement impose restrictions on us and require us to maintain compliance with specified covenants. Our ability to comply with these covenants may be affected by events beyond our control. A failure to comply with the covenants and other provisions of our outstanding debt could result in events of default under such instruments, which could permit acceleration of all of our debt and borrowings. Any required repayment of our debt as a result of a fundamental change or other acceleration would lower our current cash on hand such that we would not have those funds available for use in our business.Lease accounting guidance requires that we record a liability for operating lease activity on our consolidated balance sheet, which increases both our assets and liabilities and therefore may impact our ability to obtain the necessary financing from 29Table of Contentsfinancial institutions at commercially viable rates or at all. Our lease terms may include options to extend or terminate the lease. Periods beyond the noncancellable term of the lease are included in the measurement of the lease liability and associated asset only when it is reasonably certain that we will exercise the associated extension option or waive the termination option. We reassess the lease term if and when a significant event or change in circumstances occurs within our control. The potential impact of these options to extend could be material to our financial position and financial results.Current and future accounting pronouncements and other financial and nonfinancial reporting standards may negatively impact our financial results.We regularly monitor our compliance with applicable financial and nonfinancial reporting standards and review new pronouncements and interpretations that are relevant to us. As a result of new financial or nonfinancial standards or pronouncements, changes to existing standards or pronouncements and changes in their interpretation, we may be required to change our accounting policies, to alter our operational policies, to implement new or enhance existing systems so that they reflect new or amended financial reporting standards, and to adjust our published financial statements. For example, proposed reporting requirements such as the SEC proposals related to the enhancement and standardization of climate-related disclosures may require us to change our accounting policies, to alter our operational policies, and to implement new or enhance existing systems so that they reflect new or amended financial reporting standards, or to restate our published financial statements. Such changes may have an adverse effect on our business, financial position and operating results, or cause an adverse deviation from our revenue and operating profit targets, which may negatively impact our financial results.Risks Related to Owning Our Common StockOur quarterly results are likely to fluctuate, which may cause the value of our common stock to decline substantially.Our quarterly results are likely to fluctuate. Fluctuations have occurred due to known and unknown risks, such as the global economic impact of ongoing conflicts, including the war in Ukraine and the Israel-Hamas war, and rising interest rates. In addition, our fiscal fourth quarter has historically been our strongest quarter for new business and renewals, and the year-over-year compounding effect of this seasonality in billing patterns and overall new business and renewal activity causes the value of invoices that we generate in the fourth quarter to continually increase in proportion to our billings in the other three quarters of our fiscal year. As a result, our fiscal first quarter has typically in the past been our largest collections and operating cash flow quarter.Additionally, some of the important factors that may cause our revenues, operating results and cash flows to fluctuate from quarter to quarter include:•general economic or geopolitical conditions, including the impacts of the war in Ukraine and the Israel-Hamas war, financial market conditions, increasing costs of operation and foreign currency exchange rates, any of which can adversely affect either our customers’ ability or willingness to purchase additional subscriptions or upgrade their services, or delay prospective customers’ purchasing decisions, reduce the value of new subscription contracts, or affect attrition rates;•our ability to retain and increase sales to existing customers, attract new customers and satisfy our customers’ requirements;•the attrition rates for our services;•the size and productivity of our sales force;•the length of the sales cycle for our services;•new product and service introductions by our competitors;•our success in selling our services to large enterprises;•changes in unearned revenue and remaining performance obligation, due to seasonality, the timing of and compounding effects of renewals, invoice duration, size and timing, new business linearity between quarters and within a quarter, average contract term, the collectability of invoices related to multi-year agreements, the timing of license software revenue recognition, or fluctuations due to foreign currency movements, all of which may impact implied growth rates;•our ability to realize benefits from strategic partnerships, acquisitions or investments;•our ability to execute and realize benefits from the Restructuring Plan and other workforce reductions, or any similar actions taken in the future;•variations in the revenue mix of our services and growth rates of our subscription and support offerings, including the timing of software license sales and sales offerings that include an on-premise software element for which the revenue allocated to that deliverable is recognized upfront;•the seasonality of our sales cycle, including software license sales, and timing of contract execution and the corresponding impact on revenue recognized at a point in time;30Table of Contents•changes in our pricing policies and terms of contracts, whether initiated by us or as a result of competition, customer preference or other factors;•expenses associated with our pricing policies and terms of contracts, such as the costs of customer SMS text usage paid by us and the related impacts to our gross margin;•the seasonality of our customers’ businesses, especially our Commerce service offering customers, including retailers and branded manufacturers; •fluctuations in foreign currency exchange rates such as with respect to the U.S. Dollar against the Euro and British Pound Sterling;•the amount and timing of operating costs and capital expenditures related to the operations and expansion of our business;•the number of new employees, including the cost to recruit and train such employees;•the timing of commission, bonus and other compensation payments to employees, including decisions to guarantee some portion of commissions payments in connection with extraordinary events; •the cost, timing and management effort required for the introduction of new features to our services;•the costs associated with acquiring new businesses and technologies and the follow-on costs of integration and consolidating the results of acquired businesses;•expenses related to our real estate or changes in the nature or extent of our use of existing real estate, including our office leases and our data center capacity and expansion;•timing of additional investments in our enterprise cloud computing application and platform services and in our consulting services;•expenses related to significant, unusual or discrete events, which are recorded in the period in which the events occur, including litigation or other dispute-related settlement payments;•income tax effects resulting from, but not limited to, tax law changes, court decisions on tax matters, global tax developments applicable to multinational corporations, changes in operations or business structures and acquisition activity;•the timing of payroll and other withholding tax expenses, which are triggered by the payment of bonuses and when employees exercise their vested stock options;•technical difficulties or interruptions in our services;•changes in interest rates and our mix of investments, which impact the return on our investments in cash and marketable securities;•conditions, and particularly sudden changes, in the financial markets, which have impacted and may continue to impact the value and liquidity of our investment portfolio;•changes in the fair value of our strategic investments in early-to-late-stage privately held and public companies, including impairments, which could negatively and materially impact our financial results, particularly in periods of significant market fluctuations; •equity or debt issuances, including as consideration in or in conjunction with acquisitions;•the timing of stock awards to employees and the related adverse financial statement impact of having to expense those stock awards on a straight-line basis over their vesting schedules;•evolving regulations of cloud computing and cross-border data transfer restrictions and similar regulations;•regulatory compliance and acquisition costs; and•the impact of new accounting pronouncements and associated system implementations.Many of these factors are outside of our control, and the occurrence of one or more of them might cause our operating results to vary widely. If we fail to meet or exceed operating results expectations or if securities analysts and investors have estimates and forecasts of our future performance that are unrealistic or that we do not meet, the market price of our common stock could decline. In addition, if one or more of the securities analysts who cover us adversely change their recommendations regarding our stock, the market price of our common stock could decline.The market price of our common stock is likely to be volatile and could subject us to litigation.The trading prices of the securities of technology companies have historically been highly volatile. Accordingly, the market price of our common stock has been and is likely to continue to be subject to wide fluctuations. Factors affecting the market price of our common stock include:31Table of Contents•variations in our operating results, including operating margin, earnings per share, cash flows from operating activities, unearned revenue, remaining performance obligation, year-over-year growth rates for individual service offerings and other financial and non-financial metrics, and how those results compare to analyst expectations;•variations in, and limitations of, the various financial and other metrics and modeling used by analysts in their research and reports about our business;•forward-looking guidance to industry and financial analysts related to, for example, future revenue, current remaining performance obligation, cash flows from operating activities, operating margin and earnings per share, the accuracy of which may be impacted by various factors, many of which are beyond our control, including general economic and market conditions and unanticipated delays in the integration of acquired companies as a result of regulatory review;•our ability to meet or exceed forward-looking guidance we have given or to meet or exceed the expectations of investors, analysts or others; our ability to give forward-looking guidance consistent with past practices; and changes to or withdrawal of previous guidance or long-range targets;•changes in the estimates of our operating results or changes in recommendations by securities analysts that elect to follow our common stock;•announcements of technological innovations, new services or service enhancements, strategic alliances or significant agreements by us or by our competitors;•announcements by us or by our competitors of mergers or other strategic acquisitions, or rumors of such transactions involving us or our competitors;•announcements of customer additions and customer cancellations or delays in customer purchases;•the coverage of our common stock by the financial media, including television, radio and press reports and blogs;•recruitment or departure of key personnel;•disruptions in our service due to computer hardware, software, network or data center problems;•the economy as a whole, geopolitical conditions, including global trade and health concerns, market conditions in our industry and the industries of our customers, and financial institution instability;•trading activity or positions by a limited number of stockholders who together beneficially own a significant portion of our outstanding common stock, as well as other institutional or activist investors;•the issuance of shares of common stock by us, whether in connection with an acquisition or a capital-raising transaction; •our ability to execute on our Share Repurchase Program as planned, including whether we meet internal or external expectations around the timing or price of share repurchases, and any reductions or discontinuances of repurchases thereunder;•issuance of debt or other convertible securities; •the declaration of a dividend, or any increases or decreases to a previously declared dividend program;•the inability to conclude that our internal controls over financial reporting are effective;•changes to our credit ratings; and•ESG and other issues impacting our reputation. In addition, if the market for technology stocks or the greater securities market in general experience uneven investor confidence, the market price of our common stock has and could in the future decline for reasons unrelated to our business, operating results or financial condition, including as a reaction to events that affect other companies within, or outside, our industry. Some companies that have experienced volatility in the trading price of their stock have been the subject of securities class action litigation, such as the securities litigation against Slack that was brought before our acquisition. Such litigation, whether against Salesforce or an acquired subsidiary, could result in substantial costs and a diversion of management’s attention and resources and liability resulting from or the settlement of such litigation could result in material adverse impacts to our operating cash flows or results of operations for a given period.Provisions in our amended and restated certificate of incorporation and bylaws and Delaware law might discourage, delay or prevent a change of control of the Company or changes in our management and, therefore, depress the market price of our common stock.Our amended and restated certificate of incorporation and bylaws contain provisions that could depress the market price of our common stock by acting to discourage, delay or prevent a change in control of the Company or changes in our management that the stockholders of the Company may deem advantageous. These provisions among other things:•permit the Board to establish the number of directors;32Table of Contents•authorize the issuance of “blank check” preferred stock that our board could use to implement a stockholder rights plan (also known as a “poison pill”);•prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;•provide that the Board is expressly authorized to make, alter or repeal our bylaws; and•establish advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.In addition, Section 203 of the Delaware General Corporation Law may discourage, delay or prevent a change in control of our company. Section 203 imposes certain restrictions on merger, business combinations and other transactions between us and holders of 15 percent or more of our common stock.There can be no assurance that we will continue to declare cash dividends in any particular amounts, or at all.On February 28, 2024, we announced a quarterly dividend policy and the declaration of our first-ever cash dividend. Whether we pay cash dividends, as well as the rate at which we pay cash dividends, in the future is subject to continued capital availability, general economic and market conditions, applicable laws and agreements and our Board continuing to determine that the declaration of dividends is in the best interests of the Company and its stockholders. The declaration and payment of any dividend may be discontinued at any time and dividend amounts may be reduced at any time. A discontinuation of or reduction in our dividend payments could have a negative effect on our stock price.General RisksVolatile and significantly weakened global economic conditions have in the past and may in the future adversely affect our industry, business and results of operations.Our overall performance depends in part on worldwide economic and geopolitical conditions. The United States and other key international economies have experienced significant economic and market downturns in the past, and are likely to experience additional cyclical downturns from time to time in which economic activity is impacted by falling demand for a variety of goods and services, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity and foreign exchange markets, inflation, bankruptcies and overall uncertainty with respect to the economy. These economic conditions can arise suddenly and the full impact of such conditions can be difficult to predict. In addition, geopolitical and domestic political developments, such as existing and potential trade wars and other events beyond our control, such as war in Ukraine and the Israel-Hamas war, have increased and may continue to increase levels of political and economic unpredictability globally and the volatility of global financial markets. Moreover, these conditions have affected and may continue to affect the rate of IT spending; could adversely affect our customers’ ability or willingness to attend our events or to purchase our enterprise cloud computing services; have delayed and may delay customer purchasing decisions; and have reduced and may in the future reduce the value and duration of customer subscription contracts or cause our customers to seek to modify their existing subscription contracts. All of these risks and conditions could materially adversely affect our future sales, attrition rates and operating results.Natural disasters and other events beyond our control have in the past and may in the future materially adversely affect us.Natural disasters or other catastrophic events have in the past and may in the future cause damage or disruption to our operations, international commerce and the global economy, and thus could have a strong negative effect on us. Our business operations, the business operations of third-party providers or suppliers that we rely on to conduct our business and the business operations of our customers are subject to interruption by natural disasters, fire, power shutoffs or shortages, actual or threatened public health emergencies and other events beyond our control. For example, the occurrence of regional epidemics or a global pandemic, such as COVID-19, and related public health measures have in the past and may in the future materially affect how we and our customers operate our businesses, as well as our operating results and cash flows. Although we maintain crisis management and disaster response plans, such events could make it difficult or impossible for us to deliver our services to our customers, and could decrease demand for our services. Our corporate headquarters, and a significant portion of our personnel, research and development activities and other critical business operations, are located near major seismic faults in the San Francisco Bay Area. Because we do not carry earthquake insurance for direct earthquake-related losses and significant recovery time could be required to resume operations, our financial condition and operating results could be materially and adversely affected in the event of a major earthquake or catastrophic event, and the adverse effects of any such catastrophic event would be exacerbated if experienced at the same time as another unexpected and adverse event. Climate change may have an impact on our business.While we seek to mitigate our business risks associated with climate change by establishing robust environmental programs and partnering with organizations who are also focused on mitigating their own climate-related risks, we recognize 33Table of Contentsthat there are inherent climate-related risks wherever business is conducted. Any of our primary locations may be vulnerable to the adverse effects of climate change. For example, our offices globally have historically experienced, and are projected to continue to experience, climate-related events at an increasing frequency, including drought, water scarcity, heat waves, cold waves, flooding, wildfires and resultant air quality impacts and power shutoffs associated with climate-related events. These events in turn have impacts on inflation risks, food security, water security (including for water availability for data center cooling) and on our employees’ health and well-being. Furthermore, it is more difficult to mitigate the impact of these events on our employees working remotely or at client sites. Changing market dynamics, global policy developments and the increasing frequency and impact of extreme weather events on critical infrastructure in the United States and elsewhere have the potential to disrupt our business, the business of third-party providers or suppliers that we rely on to conduct our business and the business of our customers, and may cause us to experience higher attrition, losses and additional costs to maintain or resume operations. Additionally, failure to uphold, meet or make timely forward progress against our public commitments and goals related to climate action could adversely affect our reputation with investors, suppliers and customers, our financial performance or our ability to recruit and retain talent.34Table of ContentsITEM 1B.    UNRESOLVED STAFF COMMENTSNone.ITEM 1C.    CYBERSECURITYAs a global leader in CRM technology, our services involve the storage and transmission of our customers’ and our customers’ customers’ data. As such, we have in the past been, and likely will in the future be, the target of cybersecurity threats and other efforts to breach or compromise our services and underlying infrastructure. With trust as our foremost value and the foundation of everything we do, we recognize the importance of maintaining the safety and security of our systems and data, as our customers trust our technology to deliver the highest levels of security, privacy, performance, compliance and availability at scale. Management is responsible for the day-to-day administration of the Company’s cybersecurity policies, processes, practices and risk management. The Board, including through its dedicated Cybersecurity and Privacy committee (the “Committee”), oversees the various cybersecurity risks facing the Company and the Company’s efforts to mitigate those risks. During the last fiscal year, we did not identify any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that materially affected the Company, including its business strategy, results of operations, or financial condition. However, we face ongoing and increasing cybersecurity risks, including from bad actors that are becoming more sophisticated and effective over time, as well as a result of potential defects or disruptions in our or our customers’ services. If realized, these risks are reasonably likely to materially affect the Company. Additional information on the cybersecurity risks we face is discussed in Part I, Item 1A, “Risk Factors.”Cybersecurity Risk Management and StrategyWhen a company purchases our service offerings, they gain a trusted digital advisor who will work together with them in efforts to protect customer data. We aim to provide the most secure and compliant enterprise cloud platform on the market and we work to build trust and in-depth defense into all of our systems. Among other things, we employ a diverse, experienced team of cybersecurity professionals, engage in community events and offer free online cybersecurity incident prevention training to enable our customers to focus on their business, knowing their data is safe and accessible as needed.We seek to address material cybersecurity risks through a company-wide approach that assesses, ranks and prioritizes cybersecurity threats, vulnerabilities and issues as they are identified to maintain the confidentiality, integrity and availability of our information systems and the information that we collect and store. The Company’s cybersecurity policies, standards, processes and practices are informed by recognized frameworks established by the National Institute of Standards and Technology, the International Organization for Standardization and an array of other applicable standards-setting bodies, which are integrated into a broader risk management framework and related processes. We also hold various security-related industry certifications and attestations that have been validated by external auditors, including SOC 1, SOC 2, SOC 3, ISO 27001, 27017 and 27018, CSA STAR and others. Leveraging threat intelligence and other signals, the Company undergoes periodic testing, audits and reviews of its policies, standards, processes and practices to identify, assess and address cybersecurity risks and events. The Company also undergoes routine internal and external penetration testing. The results of such tests and assessments are evaluated by management and periodically reported to the Committee. The Company further adjusts its cybersecurity policies, standards, processes and practices based on these results. The Company also publishes attestations of its various certifications, audits, and penetration tests on its global compliance webpage. Board Oversight and GovernanceAs mentioned above, the Board established the Committee to provide dedicated oversight of cybersecurity-related management, strategy, initiatives, risks, threats and remediation activities. The Committee receives regular presentations, reports and updates from the Company’s Chief Trust Officer (“CTrO”) and other members of management on developments regarding the Company’s cybersecurity program, broader cybersecurity trends, evolving industry standards, the threat environment and other topics. After each quarterly meeting of the Committee, the Board receives a report from the Chair of the Committee with an update on the Company’s oversight of cybersecurity risks and mitigation efforts. The Committee also receives periodic reports from an experienced outside consultant with information security expertise providing insights on key focus areas to aid in the Committee’s oversight of the Company’s cybersecurity program.The Company’s processes also allow for the Board and the Committee to be informed of key cybersecurity risks outside the regular reporting schedule. While regular meetings of the Committee are scheduled on a quarterly cadence, the Committee is authorized to meet with management or individual directors at any time it deems appropriate to discuss matters relevant to the Committee. The Company’s policy is for the Board and the Committee to receive prompt and timely information regarding any 35Table of Contentscybersecurity risk (including any incident) that meets pre-established reporting thresholds, as well as ongoing updates regarding any such risk. Management Oversight and GovernanceThe CTrO, reporting to the Company’s Chief Engineering Officer (“C/E”), is responsible for designing and implementing a security program and strategy based on the mandate provided by the Board and senior management. The CTrO has extensive experience in the management of cybersecurity risk management programs, having served in various leadership roles in information technology and information security for over 15 years, including serving as the Chief Security Officer of two other large public technology companies. He also holds an undergraduate and master’s degree in computer science. We believe the Company’s business leaders, including our CEO, CFO, C/E and CLO, who have experience managing cybersecurity risk at the Company and at similar companies, have the appropriate expertise, background and depth of experience to manage risks arising from cybersecurity threats. The CTrO, in coordination with other members of senior management, works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to cybersecurity incidents in accordance with the Company’s incident response and recovery plans. To facilitate the success of the Company’s cybersecurity program, cross-functional teams throughout the Company are tasked with addressing cybersecurity threats and responding to cybersecurity incidents. Through ongoing communications with these teams, the CTrO and senior management are informed promptly about, and monitor the prevention, detection, investigation, mitigation and remediation of, cybersecurity threats. These teams are expected to operate pursuant to documented plans and playbooks that include processes for escalation of incidents to leadership and to the Committee and Board, as appropriate, based on the severity level of an incident. In addition, the Company periodically consults with outside advisors and experts to assist with assessing, identifying and managing cybersecurity risks, including to anticipate future threats and trends, and their impact on the Company’s risk management environment.Specifically, management implements the Company’s cybersecurity and risk management strategy across several areas:  •Identification and Reporting. The Company has implemented a robust, cross-functional approach to identifying, assessing and managing cybersecurity threats and risks. The Company’s program includes controls and procedures designed to properly identify, classify, and escalate cybersecurity risks to provide management with visibility and prioritization of risk mitigation efforts and to publicly report material cybersecurity incidents when appropriate.  •Threat Intelligence. The Company maintains a Threat Intelligence team focused on profiling, intelligence collection, and threat analysis supporting the Company’s ongoing efforts to identify, assess and manage cybersecurity threats. The team’s input supports both near-term response to cybersecurity events, and long-term strategic planning and development of the Company’s cybersecurity risk management framework. •Technical Safeguards. The Company implements technical safeguards that are designed to protect both the Company’s service offerings and other information systems we control from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality, vulnerability management, encryption processes and access controls, all of which are periodically evaluated and improved through risk and control assessments and in response to cybersecurity threat intelligence as well as outside audits and certifications. •Incident Response and Recovery Planning. The Company has established and maintains robust incident response, business continuity and disaster recovery plans designed to address the Company’s response to a cybersecurity incident, including the public disclosure and reporting of material incidents in a timely manner. These plans and procedures serve to guide and document a rigorous incident response program that reflects the roles of an array of stakeholders, including personnel providing technical, operational, engineering, legal and other perspectives across the Company. The Company conducts regular tabletop exercises involving multiple operational teams, including senior management, to test these plans and to familiarize personnel with their roles in a response scenario.  •Third-Party Risk Management. The Company maintains a robust, risk-based approach to identifying and overseeing cybersecurity threats presented by certain third parties, including vendors, service providers and other external users of the Company’s systems, as well as the systems of third parties that could adversely impact our business in the event of a significant cybersecurity incident affecting those third-party systems. •Education and Awareness. The Company regularly provides employee training on security-related duties and responsibilities, including knowledge about how to recognize security incidents and how to proceed if an actual or suspected incident should occur. This training is mandatory for employees across the Company, and is intended to provide the Company’s employees with effective tools to address cybersecurity threats, and to communicate the Company’s evolving information security policies, standards, processes and practices. The Company maintains several 36Table of Contentsplans designed to prepare the Salesforce Security Response Center (SSRC) with the proper training, processes and capabilities needed to effectively respond to incidents.ITEM 2.    PROPERTIESAs of January 31, 2024, our executive and principal offices for sales, marketing, professional services, development and administration consisted of approximately 0.9 million square feet of leased and owned property in San Francisco. Excluded from this amount is approximately 2.0 million square feet of leased and owned property in San Francisco that is currently leased to others, or available for lease, as we continued office space reductions in fiscal 2024. We also lease office space for our operations in various locations throughout the United States as well as office space in a number of countries in Europe, North America, Asia, South America, Africa and Australia.We operate data centers in the U.S., Europe and Asia pursuant to various co-location lease arrangements.We believe that our existing facilities and offices are adequate to meet our current requirements. If we require additional space, we believe that we will be able to obtain such space on acceptable, commercially reasonable terms.ITEM 3.    LEGAL PROCEEDINGSWe evaluate all claims and lawsuits with respect to their potential merits, our potential defenses and counterclaims, settlement or litigation potential and the expected effect on us. Our technologies may be subject to an injunction if they are found to infringe the rights of a third party. In addition, many of our subscription agreements require us to indemnify our customers for third-party intellectual property infringement claims, which could increase the cost to us of an adverse ruling on such a claim.The outcome of any claims or litigation, regardless of the merits, is inherently uncertain. Any claims and other lawsuits, and the disposition of such claims and lawsuits, whether through settlement or litigation, could be time-consuming and expensive to resolve, divert our attention from executing our business plan, result in efforts to enjoin our activities, lead to attempts by third parties to seek similar claims and, in the case of intellectual property claims, require us to change our technology, change our business practices, pay monetary damages or enter into short- or long-term royalty or licensing agreements.For more information regarding legal proceedings see Note 14 “Legal Proceedings and Claims” to the consolidated financial statements in Item 8 of Part I.ITEM 4.    MINE SAFETY DISCLOSURESNot applicable.ITEM 4A.    INFORMATION ABOUT OUR EXECUTIVE OFFICERSThe following sets forth certain information regarding our current executive officers as of February 29, 2024 (in alphabetical order):NameAgePositionMarc Benioff59Chair of the Board, CEO and co-FounderParker Harris57Director, Chief Technology Officer, Slack and co-FounderMiguel Milano55President and Chief Revenue OfficerBrian Millham54President and Chief Operating OfficerSabastian Niles44President and Chief Legal OfficerSundeep Reddy51Executive Vice President and Chief Accounting OfficerSrinivas Tallapragada54President and Chief Engineering OfficerAmy Weaver56President and Chief Financial OfficerMarc Benioff is Chair of the Board, Chief Executive Officer and co-Founder of Salesforce and a pioneer of cloud computing. Mr. Benioff has served as Chief Executive Officer since 2001 and under his leadership, Salesforce has become the #1 provider of CRM software globally. Mr. Benioff was named Innovator of the Decade by Forbes and recognized as one of the World’s 50 Greatest Leaders by Fortune and 10 Best-Performing CEOs by Harvard Business Review. As a member of the World Economic Forum (WEF) Board of Trustees, Mr. Benioff serves as the inaugural chair of WEF’s Forum Center for the Fourth Industrial Revolution in San Francisco. Mr. Benioff currently serves as Chair of the Salesforce Foundation. Mr. Benioff 37Table of Contentsreceived his B.S. in Business Administration from the University of Southern California, where he also serves on the Board of Trustees.Parker Harris has served as a Director since August 2018 and as Chief Technology Officer of Slack since January 2024. Mr. Harris co-founded Salesforce in February 1999 and has served in senior technical positions since inception, including Chief Technology Officer from September 2016 to January 2024 and Executive Vice President, Technology from December 2004 to February 2013. Prior to Salesforce, Mr. Harris co-founded Left Coast Software, a Java consulting firm, and served as its Vice President from October 1996 to February 1999. Mr. Harris received his B.A. in English Literature from Middlebury College.Miguel Milano has served as our President and Chief Revenue Officer since August 2023. Prior to rejoining Salesforce, Mr. Milano served as Co-Owner and Chief Revenue Officer at Celonis, a German data processing company, from April 2020 to July 2023. Previously, Mr. Milano served in various international sales leadership roles at Salesforce from 2011 to 2020, including President, International (EMEA, APAC and LACA) from August 2018 to March 2020. Prior to that, Mr. Milano held various leadership positions at Oracle Corporation, i2 Technologies, Telefónica and McKinsey & Company. Mr. Milano received his B.S. and M.S.E. in Electrical Engineering from the Polytechnic University of Catalonia and M.B.A. from the Sloan School of Management at the Massachusetts Institute of Technology.Brian Millham has served as our President and Chief Operating Officer since August 2022. Mr. Millham has been with Salesforce since its inception in 1999, most recently serving as Chief Customer Success Officer and Chief Operating Officer, Global Distribution from February 2022 to August 2022. From February 2021 to February 2022, he served as President, Customer Success Group and Chief Operating Officer, Worldwide Distribution. From August 2018 to February 2021, Mr. Millham served as President, Customer Success Group. From June 2017 to August 2018, Mr. Millham served as Executive Vice President, Americas Commercial, and B-to-C Sales, Global Strategy. Previously, Mr. Millham served in various leadership roles in business development, account management and sales. Mr. Millham received his B.A. from the University of California, Berkeley.Sabastian Niles has served as our President and Chief Legal Officer since July 2023. He oversees Salesforce’s global legal and corporate affairs organization, including government affairs and the office of ethical and humane use of technology. Prior to joining Salesforce, Mr. Niles was a Partner at Wachtell, Lipton, Rosen & Katz, where he practiced law from September 2006 to July 2023. Mr. Niles received his B.S., B.A. and B.S. in Finance, Economics and Decision & Information Sciences, respectively, from the University of Maryland and J.D. from Harvard Law School.Sundeep Reddy has served as our Chief Accounting Officer since September 2021. Prior to joining Salesforce, Mr. Reddy served in a variety of corporate finance leadership roles at McKesson Corporation, a pharmaceutical distribution company, from 2013 to 2021, including Senior Vice President, Controller and Chief Accounting Officer from July 2018 to September 2021, Senior Vice President, Assistant Controller from June 2017 to July 2018, Senior Vice President, McKesson Technology Solutions Finance and Accounting from March 2017 to June 2017 and Vice President, Controller of McKesson Technology Solutions from December 2013 to February 2017. Mr. Reddy is a Certified Public Accountant and received his B.B.A. from Georgia State University and M.B.A. from Emory University.Srinivas Tallapragada has served as our President and Chief Engineering Officer since December 2019. Prior to this, he served as our President, Technology from June 2018 to December 2019, Executive Vice President, Engineering from March 2014 to June 2018 and Senior Vice President, Engineering from May 2012 to February 2014. Prior to Salesforce, Mr. Tallapragada served as Senior Vice President at Oracle Corporation from April 2011 to June 2012 and as Senior Vice President at SAP Labs from February 2009 to April 2011. Previously, Mr. Tallapragada held various technical management roles at Oracle, Infosys and Asian Paints. Mr. Tallapragada currently serves on the Board of Directors of GoDaddy Inc. Mr. Tallapragada received his masters degree from the School of Human Resources at XLRI, Jamshedpur and B.T. in Computer Science from the National Institute of Technology, Warangal.Amy Weaver has served as our President and Chief Financial Officer since February 2021. Prior to this, she served as our President and Chief Legal Officer from January 2020 to January 2021, President, Legal & Corporate Affairs and General Counsel from February 2017 to January 2020, Executive Vice President and General Counsel from July 2015 to February 2017 and Senior Vice President and General Counsel from October 2013 to July 2015. Prior to Salesforce, Ms. Weaver served as Executive Vice President and General Counsel at Univar Inc., a global chemical distributor, from December 2010 to June 2013 and Senior Vice President and Deputy General Counsel at Expedia, Inc., an online travel services provider, from July 2005 to December 2010. Previously, Ms. Weaver practiced law at Cravath, Swaine & Moore LLP and Perkins Coie LLP. She also served as a clerk on the U.S. Court of Appeals, Ninth Circuit and as a legislative assistant to a member of the Hong Kong Legislative Council. Ms. Weaver currently serves on the Board of Directors of McDonald’s Corporation and Habitat for Humanity International. Ms. Weaver received her B.A. in Political Science from Wellesley College and J.D. from Harvard Law School.38Table of ContentsPART II. OTHER INFORMATIONITEM 5.     MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESMarket Information for Common StockOur common stock is traded on the New York Stock Exchange under the symbol “CRM.”Dividend PolicyPrior to February 2024, we had never declared or paid any cash dividends on our common stock. On February 28, 2024, we announced a quarterly dividend policy and the declaration of our first-ever cash dividend. This cash dividend of $0.40 per share of the Company’s outstanding common stock will be paid on April 11, 2024 to stockholders of record as of the close of business on March 14, 2024. The payment of future cash dividends is subject to future declaration by our Board, which will be based in part on continued capital availability, general economic and market conditions, applicable laws and agreements and our Board continuing to determine that the declaration of dividends is in the best interests of the Company and its stockholders.StockholdersAs of January 31, 2024, there were 387 registered stockholders of record of our common stock, including The Depository Trust Company, which holds shares of Salesforce common stock on behalf of an indeterminate number of beneficial owners.Stock Performance GraphThe following shall not be deemed incorporated by reference into any of our other filings under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended.The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the Standard & Poor’s 500 Index ("S&P 500 Index"), Nasdaq Computer & Data Processing Index ("Nasdaq Computer"), the Nasdaq 100 Index and the Dow Jones Industrial Average for each of the last five fiscal years ended January 31, 2024, assuming an initial investment of $100. Data for the S&P 500 Index, Nasdaq Computer, Nasdaq 100 Index and Dow Jones Industrial Average assume reinvestment of dividends.The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock.39Table of Contents1/31/20191/31/20201/31/20211/31/20221/31/20231/31/2024Salesforce$100 $120 $148 $153 $111 $185 S&P 500 Index100 119 137 167 151 179 Nasdaq Computer100 144 210 264 204 317 Nasdaq 100 Index100 130 187 216 175 248 Dow Jones Industrial Average100 113 120 141 136 153 Recent Sales of Unregistered SecuritiesNone.Issuer Purchases of Equity Securities Share repurchases of the Company’s common stock for the three months ended January 31, 2024 were as follows (in millions, except for average price paid per share):Period Total Number of Shares Purchased (1)Average Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced Program (1)Approximate Dollar Value of Shares that May Yet Be Purchased Under the ProgramNovember 20233$217.993$9,432December 20232$258.802$8,899January 20242$269.842$8,326Total77(1)    In August 2022, the Board of Directors authorized a program to repurchase up to $10.0 billion of the Company’s common stock (the “Share Repurchase Program”). In February 2023, the Board of Directors authorized an additional $10.0 billion in repurchases under the Share Repurchase Program, for an aggregate total authorized of $20.0 billion. In February 2024, the Board of Directors authorized an additional $10.0 billion in repurchases under the Share Repurchase Program, for an aggregate total authorized of $30.0 billion. The Share Repurchase Program does not have a fixed expiration date and does not obligate the Company to acquire any specific number of shares. Under the Share Repurchase Program, shares of common stock may be repurchased using a variety of methods, including privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act, as part of accelerated share repurchases and other methods. The timing, manner, price and amount of any repurchases are determined by the Company in its discretion and depend on a variety 40Table of Contentsof factors, including legal requirements, price and economic and market conditions. All repurchases disclosed in the table were made pursuant to the publicly announced Share Repurchase Program. ITEM 6.    RESERVED41Table of ContentsITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion contains forward-looking statements, including, without limitation, our expectations and statements regarding our outlook and future revenues, expenses, results of operations, liquidity, plans, strategies and management objectives and any assumptions underlying any of the foregoing. Our actual results may differ significantly from those projected in the forward-looking statements. Our forward-looking statements and factors that might cause future actual results to differ materially from our recent results or those projected in the forward-looking statements include, but are not limited to, those discussed in the section titled “Forward-Looking Information” and “Risk Factors” of this Annual Report on Form 10-K. Except as required by law, we assume no obligation to update the forward-looking statements or our risk factors for any reason.The following section generally discusses fiscal 2024 and 2023 items and year-to-year comparisons between fiscal 2024 and 2023, as well as certain fiscal 2022 items. Discussions of fiscal 2022 items and year-to-year comparisons between fiscal 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 31, 2023.OverviewSalesforce is a global leader in customer relationship management (“CRM”) technology that brings companies and customers together in the digital age. Founded in 1999, we enable companies of every size and industry to take advantage of powerful technologies to connect to their customers in a whole new way and help them transform their businesses around the customer in this digital-first world.Our Customer 360 platform unites sales, service, marketing, commerce and IT teams by connecting customer data across systems, apps and devices to create a complete view of customers. With this single source of customer truth, teams can be more responsive, productive and efficient, deliver intelligent, personalized experiences across every channel and increase productivity. With Slack, we provide a digital headquarters where companies, employees, governments and stakeholders can create success from anywhere. We continue to invest for growth, including investing in generative AI across all products, which we believe will change how our customers help their customers, and continuously look to expand our leadership role in the cloud computing industry.We continue to focus on several key growth levers, including driving multiple service offering adoption, increasing our penetration with enterprise and international customers and expanding our industry-specific reach with more vertical software solutions. These growth levers often require a more sophisticated go-to-market approach and, as a result, we may incur additional costs upfront to obtain new customers and expand our relationships with existing customers, including additional sales and marketing expenses specific to subscription and support revenue. As a result, we have seen that customers with many of these characteristics drive higher annual revenues and have lower attrition rates than our company average.In addition to our focus on top line growth levers, we are also focused on reducing our operating expenses to improve our operating margin. For example, in January 2023, we announced a restructuring plan (the “Restructuring Plan”) intended to reduce operating costs, improve operating margins and continue advancing our ongoing commitment to profitable growth. The Restructuring Plan included a reduction of our workforce by approximately ten percent and office space reductions within certain markets, both of which were substantially complete as of the first quarter of fiscal 2024. In addition to the Restructuring Plan, we continue to focus on evaluating and operationalizing future programs to further our transformational efforts, including an additional focused workforce reduction that was initiated and substantially completed in the fourth quarter of fiscal 2024. We have started to see improvements in our operating expenses across all operating categories, with the most opportunity in sales and marketing expense and general and administrative expenses. Over the long term, we expect to see additional operating expense improvements, which could include various restructuring initiatives to drive operational efficiencies. Highlights from Fiscal 2024•Revenue: For fiscal 2024, revenue was $34.9 billion, an increase of 11 percent year-over-year. •Income from Operations: For fiscal 2024, income from operations was $5.0 billion as compared to $1.0 billion from a year ago. Operating margin, which represents income from operations as a percentage of total revenue, increased to approximately 14 percent for the fiscal year ended January 31, 2024 compared to approximately three percent for the same period in the prior year.•Earnings per Share: For fiscal 2024, diluted earnings per share was $4.20 as compared to diluted earnings per share of $0.21 from a year ago. •Cash: Cash provided by operations for fiscal 2024 was $10.2 billion, an increase of 44 percent year-over-year. Total cash, cash equivalents and marketable securities as of January 31, 2024 was $14.2 billion. 42Table of Contents•Remaining Performance Obligation: Total remaining performance obligation, which represents all future revenue under contract yet to be recognized, as of January 31, 2024 was approximately $56.9 billion, an increase of 17 percent year-over-year. Current remaining performance obligation as of January 31, 2024 was approximately $27.6 billion, an increase of 12 percent year-over-year. •Share Repurchase Program: During the fiscal year ended January 31, 2024, we repurchased approximately 36 million shares of our common stock for approximately $7.7 billion.•Restructuring: For fiscal 2024, we incurred approximately $988 million in costs related to our restructuring activities, primarily related to the Restructuring Plan.We continue to see the impact of macroeconomic factors and the more measured buying behavior of our customers on our business and our customers’ businesses in ways that are difficult to isolate and quantify. Throughout fiscal 2024, we continued to experience elongated sales cycles, additional deal approval layers and deal compression. Slower growth in new and renewal business, particularly if sustained, impacts our remaining performance obligation, revenues and our ability to meet financial guidance and long-term targets.In addition, the expanding global scope of our business and the heightened volatility of global markets expose us to the risk of fluctuations in foreign currency markets. Foreign currency fluctuations minimally impacted revenues in the fiscal year ended January 31, 2024 and our current remaining performance obligation was negatively impacted by one percent as of January 31, 2024 compared to what we would have reported as of January 31, 2023 using constant currency rates. During fiscal 2023, the United States Dollar strengthened significantly against certain foreign currencies in the markets in which we operate, particularly against the Euro, British Pound Sterling and Japanese Yen. The impact of foreign currency fluctuations could impact our near-term results and ability to accurately predict our future results and earnings. The impact of these fluctuations can also be compounded by the seasonality of our business in which our fourth quarter has historically been our strongest quarter for new business and renewals.Fiscal YearOur fiscal year ends on January 31. References to fiscal 2024, for example, refer to the fiscal year ending January 31, 2024.Operating SegmentsWe operate as one segment. See Note 1 “Summary of Business and Significant Accounting Policies” to the consolidated financial statements for further discussion. Sources of RevenuesWe derive our revenues from two sources: (1) subscription and support revenues and (2) professional services and other revenues. Subscription and support revenues accounted for approximately 93 percent of our total revenues for fiscal 2024. Subscription and support revenues include subscription fees from customers accessing our enterprise cloud computing services (collectively, “Cloud Services”), software license revenues from the sales of term and perpetual licenses, and support revenues from the sale of support and updates beyond the basic subscription fees or related to the sales of software licenses. Our Cloud Services allow customers to use our multi-tenant software without taking possession of the software. Revenue is generally recognized ratably over the contract term. Subscription and support revenues also include revenues associated with term software licenses that provide the customer with a right to use the software as it exists when made available. Revenues from software licenses are generally recognized at the point in time when the software is made available to the customer. Revenue from support and updates is recognized as such support and updates are provided, which is generally ratably over the contract term. Changes in contract duration for multi-year licenses can impact the amount of revenues recognized upfront. Revenues from software licenses represent less than ten percent of total subscription and support revenue for fiscal 2024.The revenue growth rates of each of our service offerings, as described below in “Results of Operations,” fluctuate from quarter to quarter and over time. Additionally, we manage the total balanced product portfolio to deliver solutions to our customers and, as a result, the revenue result for each offering is not necessarily indicative of the results to be expected for any subsequent quarter. In addition, some of our Cloud Service offerings have similar features and functions. For example, customers may use our Sales, Service or Platform service offerings to record account and contact information, which are similar features across these service offerings. Depending on a customer’s actual and projected business requirements, more than one service offering may satisfy the customer’s current and future needs. We record revenue based on the individual products ordered by a customer, not according to the customer’s business requirements and usage.Our growth in revenues is also impacted by attrition. Attrition represents the reduction or loss of the annualized value of our contracts with customers. We calculate our attrition rate at a point in time on a trailing twelve-month basis as of the end of each month. Beginning in the first quarter of fiscal 2024, we included Mulesoft and Tableau in our attrition calculation. As of January 31, 2024, our attrition rate, excluding Slack, was approximately eight percent. 43Table of ContentsWe continue to maintain a variety of customer programs and initiatives, which, along with increasing enterprise adoption, have helped keep our attrition rate consistent as compared to the prior year. Consistent attrition rates play a role in our ability to maintain growth in our subscription and support revenues. Seasonal Nature of Unearned Revenue, Accounts Receivable and Operating Cash FlowUnearned revenue primarily consists of billings to customers for our subscription service. Over 90 percent of the value of our billings to customers is for our subscription and support service. We generally invoice our customers in advance, in annual installments, and typical payment terms provide that our customers pay us within 30 days of invoice. Amounts that have been invoiced are recorded in accounts receivable and in unearned revenue or in revenue depending on whether transfer of control to customers has occurred. In general, we collect our billings in advance of the subscription service period. We typically issue renewal invoices in advance of the renewal service period, and depending on timing, the initial invoice for the subscription and services contract and the subsequent renewal invoice may occur in different quarters. There is a disproportionate weighting toward annual billings in the fourth quarter, primarily as a result of large enterprise account buying patterns. Our fourth quarter has historically been our strongest quarter for new business and renewals. The year-on-year compounding effect of this seasonality in both billing patterns and overall new and renewal business causes the value of invoices that we generate in the fourth quarter for both new business and renewals to increase as a proportion of our total annual billings. Accordingly, because of this billing activity, our first quarter is typically our largest collections and operating cash flow quarter. Generally, our third quarter has historically been our smallest operating cash flow quarter. Unearned revenues, accounts receivable and operating cash flow may also be impacted by acquisitions. For example, operating cash flows may be adversely impacted by acquisitions due to transaction costs, financing costs such as interest expense and lower operating cash flows from the acquired entity. Remaining Performance Obligation Our remaining performance obligation represents all future revenue under contract that has not yet been recognized as revenue and includes unearned revenue and unbilled amounts. Our current remaining performance obligation represents future revenue under contract that is expected to be recognized as revenue in the next 12 months. Remaining performance obligation is not necessarily indicative of future revenue growth and is influenced by several factors, including seasonality, the timing of renewals, average contract terms, foreign currency exchange rates and fluctuations in new business growth. Remaining performance obligation is also impacted by acquisitions. Unbilled portions of the remaining performance obligation denominated in foreign currencies are revalued each period based on the period end exchange rates. For multi-year subscription agreements billed annually, the associated unbilled balance and corresponding remaining performance obligation are typically high at the beginning of the contract period, zero just prior to renewal, and increase if the agreement is renewed. Low remaining performance obligation attributable to a particular subscription agreement is often associated with an impending renewal but may not be an indicator of the likelihood of renewal or future revenue from such customer. Changes in contract duration or the timing of delivery of professional services can impact remaining performance obligation as well as the allocation between current and non-current remaining performance obligation.Cost of Revenues and Operating ExpensesCost of RevenuesCost of subscription and support revenues primarily consists of expenses related to delivering our service and providing support, including the costs of data center capacity, certain fees paid to various third parties for the use of their technology, services and data, employee-related costs such as salaries and benefits, and allocated overhead. Our cost of subscription and support revenues also includes amortization of certain acquisition-related intangible assets, such as the amortization of the cost associated with an acquired company’s research and development efforts. Also included in the cost of subscription and support revenues are expenses incurred supporting the free user base of Slack, including third-party hosting costs and employee-related costs, including stock-based compensation expense, specific to customer experience and technical operations.Cost of professional services and other revenues consists primarily of employee-related costs associated with these services, including stock-based compensation expense, the cost of subcontractors, certain third-party fees and allocated overhead. We believe that our professional services organization facilitates the adoption of our service offerings, helps us to secure larger subscription revenue contracts and supports our customers’ success. The cost of professional services may exceed revenues from professional services in future fiscal periods.  Research and DevelopmentResearch and development expenses consist primarily of salaries and related expenses, including stock-based compensation expense for our engineering staff associated with product development, as well as allocated overhead. 44Table of ContentsMarketing and Sales Marketing and sales expenses make up the majority of our operating expenses and consist primarily of salaries and related expenses, including stock-based compensation expense and commissions, for our sales and marketing staff, as well as payments to partners, marketing programs and allocated overhead. Marketing programs consist of advertising, events, corporate communications, brand building and product marketing activities. We capitalize certain costs to obtain customer contracts, such as commissions, and amortize these costs on a straight-line basis. As such, the timing of expense recognition for these commissions is not consistent with the timing of the associated cash payment. Our marketing and sales expenses include amortization of certain acquisition-related intangible assets, such as the amortization of the cost associated with an acquired company’s trade names, customer lists and customer relationships. General and Administrative General and administrative expenses consist primarily of salaries and related expenses, including stock-based compensation expense, for finance and accounting, legal, internal audit, human resources and management information systems personnel, professional services fees and allocated overhead. We allocate overhead such as information technology infrastructure, rent and occupancy charges based on headcount. Employee benefit costs and taxes are allocated based upon a percentage of total compensation expense. As such, these types of expenses are reflected in each cost of revenue and operating expense category.RestructuringRestructuring, primarily related to the Restructuring Plan, consists of charges related to employee transition, severance payments, employee benefits and stock-based compensation as well as exit charges associated with office space reductions. The actions associated with the employee restructuring under the Restructuring Plan, as well as the workforce reduction initiated in the fourth quarter of fiscal 2024, are substantially complete. The actions associated with the real estate restructuring under the Restructuring Plan are expected to be fully complete in fiscal 2026. Restructuring excludes allocated overhead.Critical Accounting Policies and EstimatesOur consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.We believe that of our significant accounting policies, which are described in Note 1 “Summary of Business and Significant Accounting Policies” to our consolidated financial statements, the following accounting policies and specific estimates involve a greater degree of judgment and complexity.Revenue Recognition - Contracts with Multiple Performance Obligations. We enter into contracts with our customers that may include promises to transfer multiple Cloud Services, software licenses, premium support and professional services. A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct. Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require significant judgment.Cloud Services and software licenses are distinct as such offerings are often sold separately. In determining whether professional services are distinct, we consider the following factors for each professional services agreement: availability of the services from other vendors, the nature of the professional services, the timing of when the professional services contract was signed in comparison to the subscription start date and the contractual dependence of the service on the customer’s satisfaction with the professional services work. To date, we have generally concluded that professional services included in contracts with multiple performance obligations are distinct.We allocate the transaction price to each performance obligation on a relative standalone selling price ("SSP") basis. The SSP is the price at which we would sell a promised product or service separately to a customer. Judgment is required to determine the SSP for each distinct performance obligation. We determine SSP by considering our overall pricing objectives and market conditions. Significant pricing practices taken into consideration include our discounting practices, the size and volume of our transactions, the customer demographic, the geographic area where services are sold, price lists, our go-to-market strategy and historical and current sales and contract prices. In instances where we do not sell or price a product or service separately, we maximize the use of observable inputs by using information that may include market conditions. As our go-to-market strategies evolve, we may modify our pricing practices in the future, which could result in changes to SSP.In certain cases, we are able to establish SSP based on observable prices of products or services sold separately in comparable circumstances to similar customers. We use a single amount to estimate SSP when it has observable prices. If SSP 45Table of Contentsis not directly observable, for example when pricing is highly variable, we use a range of SSP. We determine the SSP range using information that may include pricing practices or other observable inputs. We typically have more than one SSP for individual products and services due to the stratification of those products and services by customer size and geography.Business Combinations. Accounting for business combinations requires us to make significant estimates and assumptions, especially at the acquisition date with respect to tangible and intangible assets acquired and liabilities assumed and pre-acquisition contingencies. We use our best estimates and assumptions to accurately assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date as well as the useful lives of those acquired intangible assets.Critical estimates in valuing certain of the intangible assets and goodwill we have acquired are:•future expected cash flows from subscription and support contracts, professional services contracts, other customer contracts and acquired developed technologies and patents;•historical and expected customer attrition rates and anticipated growth in revenue from acquired customers;•assumptions about the period of time the acquired trade name will continue to be used in our offerings;•discount rates;•uncertain tax positions and tax-related valuation allowances assumed; •fair value of assumed equity awards; and•fair value of pre-existing relationships.Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.Income Taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized based on the weighting of positive and negative evidence. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character, for example, ordinary income or capital gains, within the carryback or carryforward periods available under the applicable tax law. We regularly review the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. Our judgment regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute our business plans and tax planning strategies. Should there be a change in the ability to recover deferred tax assets, our income tax provision would increase or decrease in the period in which the assessment is changed.Our tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. We recognize the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority, based on the technical merits. The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority. We recognize interest accrued and penalties related to unrecognized tax benefits in our income tax provision.Strategic Investments. Accounting for strategic investments in privately held debt and equity securities in which we do not have a controlling interest or significant influence requires us to make significant estimates and assumptions. Valuations of privately held securities are inherently complex and require judgment due to the lack of readily available market data. Privately held debt and equity securities are valued using significant unobservable inputs or data in an inactive market and these valuations require our judgment due to the absence of market prices and inherent lack of liquidity. The carrying values of our privately held equity securities are adjusted if there are observable price changes in a same or similar security from the same issuer or if there are identified events or changes in circumstances that may indicate impairment, as discussed below. In determining the estimated fair value for these investments, we utilize the most recent data available and apply valuation methods, including the market approach and option pricing models (“OPM”), adjusted to reflect the specific rights and preferences of the classes of securities we hold. Such information available to us from investee companies is supplemented with estimates such as volatility and expected time to liquidity.We assess the privately held debt and equity securities in our strategic investment portfolio for impairment quarterly. Our impairment analysis encompasses an assessment of both qualitative and quantitative analyses of key factors including the investee’s financial metrics, market acceptance of the product or technology, and the rate at which the investee is using its cash. Depending on our contractual rights as an investor, investee specific information available to us to make this assessment may be limited or may be available on a delayed basis. If the investment is considered to be impaired, we record the investment at fair value by recognizing an impairment through the consolidated statement of operations and establishing a new carrying value for the investment.The particular privately held debt and equity securities we hold, and their rights and preferences relative to those of other securities within the capital structure, may impact the magnitude by which our investment value moves in relation to movement of the total enterprise value of the company. As a result, our investment value in a specific company may move by more or less than any change in the value of that overall company. An immediate decrease of ten percent in the enterprise values of our 46Table of Contentslargest privately held equity securities, representing 37 percent of our total strategic investments as of January 31, 2024, could result in a $107 million reduction in the value of our investment portfolio.Results of OperationsThe following tables set forth selected data for each of the periods indicated (in millions):4Fiscal Year Ended January 31, 2024% of Total Revenues2023% of Total Revenues2022% of Total RevenuesRevenues:Subscription and support$32,537 93 %$29,021 93 %$24,657 93 %Professional services and other2,320 7 2,331 7 1,835 7 Total revenues34,857 100 31,352 100 26,492 100 Cost of revenues (1)(2):Subscription and support 6,177 18 5,821 19 5,059 19 Professional services and other 2,364 7 2,539 8 1,967 8 Total cost of revenues8,541 25 8,360 27 7,026 27 Gross profit26,316 75 22,992 73 19,466 73 Operating expenses (1)(2):Research and development4,906 14 5,055 16 4,465 17 Marketing and sales12,877 37 13,526 43 11,855 44 General and administrative2,534 7 2,553 8 2,598 10 Restructuring 988 3 828 3 0 0 Total operating expenses21,305 61 21,962 70 18,918 71 Income from operations5,011 14 1,030 3 548 2 Gains (losses) on strategic investments, net (277)(1)(239)(1)1,211 5 Other income (expense)216 1 (131)0 (227)(1)Income before provision for income taxes4,950 14 660 2 1,532 6 Provision for income taxes(814)(2)(452)(1)(88)(1)Net income$4,136 12 %$208 1 %$1,444 5 %(1) Amounts related to amortization of intangible assets acquired through business combinations, as follows (in millions): Fiscal Year Ended January 31, 2024% of Total Revenues2023% of Total Revenues2022% of Total RevenuesCost of revenues$978 3 %$1,035 3 %$897 3 %Marketing and sales891 2 916 3 727 3 (2) Amounts related to stock-based compensation expense, as follows (in millions): Fiscal Year Ended January 31, 2024% of Total Revenues2023% of Total Revenues2022% of Total RevenuesCost of revenues$431 1 %$499 2 %$386 1 %Research and development972 3 1,136 3 918 4 Marketing and sales1,062 3 1,256 4 1,104 4 General and administrative299 1 368 1 371 1 Restructuring 23 0 20 0 0 0 47Table of ContentsThe following table sets forth selected balance sheet data and other metrics for each of the periods indicated (in millions, except remaining performance obligation, which is presented in billions): As of January 31, 2024January 31, 2023Cash, cash equivalents and marketable securities$14,194 $12,508 Unearned revenue19,003 17,376 Remaining performance obligation56.9 48.6 Principal due on our outstanding debt obligations (1)9,500 10,682 (1) Amounts do not include operating or financing lease obligations.Remaining performance obligation represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. Fiscal Year Ended January 31, 2024 and 2023Revenues Fiscal Year Ended January 31,Variance(in millions)20242023DollarsPercentSubscription and support$32,537 $29,021 $3,516 12 %Professional services and other2,320 2,331 (11)0 %Total revenues$34,857 $31,352 $3,505 11 %The increase in subscription and support revenues for fiscal 2024 was primarily caused by volume-driven increases from new business, which includes new customers, upgrades and additional subscriptions from existing customers. Pricing was not a significant driver of the increase in revenues for either period. Revenues from term software licenses, which are recognized at a point in time, represented approximately seven percent and six percent of total subscription and support revenues for fiscal 2024 and 2023, respectively. Subscription and support revenues accounted for approximately 93 percent of our total revenues for fiscal 2024 and 2023.The decrease in professional services and other revenues was due primarily to less demand for larger, multi-year transformation engagements and, in some cases, delayed projects. These trends may continue in the near term.Subscription and Support Revenues by Service OfferingSubscription and support revenues consisted of the following (in millions): Fiscal Year Ended January 31, 2024As a % of Total Subscription and Support Revenues2023As a % of Total Subscription and Support RevenuesGrowth RateSales $7,580 23 %$6,831 24 %11 %Service8,245 25 7,369 25 12 Platform and Other6,611 21 5,967 20 11 Marketing and Commerce 4,912 15 4,516 16 9 Integration and Analytics (1)5,189 16 4,338 15 20 Total$32,537 100 %$29,021 100 %12 %(1) In the fourth quarter of fiscal year 2024, the Company renamed the service offering previously referred to as Data to Integration and Analytics, which includes Mulesoft and Tableau. Our industry vertical service offerings revenue is included in one of the above service offerings depending on the primary service purchased.48Table of ContentsIntegration and Analytics subscription and support revenues include revenues from term software licenses, which are recognized at the point in time when the software is made available to the customer. Therefore, we expect Integration and Analytics to experience greater volatility in revenues period to period compared to our other service offerings. Additionally, as we transition customers within the Integration and Analytics offering from term software licenses to subscription based services, revenue associated with such customers will generally be recognized ratably over the contract term, which we expect may result in potentially less revenue in the period the customer transitions but potentially increasing revenues over the remaining term.Revenues by Geography Fiscal Year Ended January 31,(in millions)2024As a % of Total Revenues2023As a % of Total RevenuesGrowth RateAmericas$23,289 67 %$21,250 68 %10 %Europe8,128 23 7,163 23 13 Asia Pacific3,440 10 2,939 9 17 Total$34,857 100 %$31,352 100 %11 %Revenues by geography are determined based on the region of the Salesforce contracting entity, which may be different than the region of the customer. The increase in revenues across all regions was due primarily to the continued execution of our business and growth strategy, including increasing our geographic reach primarily through extending our go-to-market capabilities globally. During fiscal 2024, revenues outside of the Americas were minimally impacted by foreign currency fluctuations compared to fiscal 2023.Cost of Revenues Fiscal Year Ended January 31,VarianceDollars(in millions)2024As a % of Total Revenues2023As a % of Total RevenuesSubscription and support$6,177 18 %$5,821 19 %$356 Professional services and other2,364 7 %2,539 8 %(175)Total cost of revenues$8,541 25 %$8,360 27 %$181 For fiscal 2024, the increase in cost of revenues in absolute dollars was primarily due to an increase in enterprise cloud computing services and data center capacity, which was partially offset by a reduction of third-party expenses. The cost of revenues as a percentage of total revenues during fiscal 2024 decreased by two percent from the same period a year ago due to a decrease in relative employee-related costs, including stock-based compensation expense, as well as reduced third-party expenses. Our cost of revenues headcount decreased by two percent during fiscal 2024 driven by the Restructuring Plan.  We intend to continue to invest additional resources in our enterprise cloud computing services and data center capacity to allow us to scale with our customers and continue to evolve our security measures. The timing of these expenses may adversely affect our cost of revenues as a percentage of revenues in the near term due to fluctuations in demand for our service offerings.Operating Expenses Fiscal Year Ended January 31,VarianceDollars(in millions)2024As a % of Total Revenues2023As a % of Total RevenuesResearch and development$4,906 14 %$5,055 16 %$(149)Marketing and sales12,877 37 13,526 43 (649)General and administrative2,534 7 2,553 8 (19)Restructuring 988 3 828 3 160 Total operating expenses$21,305 61 %$21,962 70 %$(657)For fiscal 2024, the decrease in research and development expenses in absolute dollars and as a percentage of revenue was primarily due to a decrease in employee-related costs, including stock-based compensation expense. However, at the end of  fiscal 2024, we began to invest in incremental AI resources to accelerate further growth and as a result our research and development headcount increased by five percent during fiscal 2024.49Table of ContentsWe expect that research and development expenses will likely remain consistent as a percentage of revenue in the near term as we continue to invest in technology to support the development of new, and improve existing, technologies, including our AI technologies and our Data Cloud service offering, and the integration of acquired technologies combined with our anticipated revenue growth in line with these incremental expenses.For fiscal 2024, the decrease in marketing and sales expenses in absolute dollars and as a percentage of revenue was primarily due to a decrease in employee-related costs, including stock-based compensation expense. Our marketing and sales headcount decreased by 14 percent during fiscal 2024 driven by our restructuring initiatives and our hiring pause that was in effect during fiscal year 2024.We expect that marketing and sales expenses will likely decrease as a percentage of revenues in the near term as we continue to focus on leveraging our self-serve and partner-led channels and increasing our sales productivity.For fiscal 2024, the decrease in general and administrative expenses in absolute dollars and as a percentage of revenue was primarily due to a decrease in employee-related costs, including stock-based compensation expense. Our general and administrative headcount decreased by 20 percent during fiscal 2024 driven by the Restructuring Plan and our hiring pause that was in effect during fiscal year 2024.We expect that general and administrative expenses will likely decrease as a percentage of revenues in the near term as we continue to invest in process efficiency initiatives.In fiscal 2024, approximately $988 million of costs were incurred related to our restructuring initiatives, of which approximately $541 million relates to employee transition, severance payments, employee benefits and stock-based compensation expense and $447 million relates to exit charges associated with office space reductions. We do not expect to incur significant additional charges in connection with our initiatives in the near term. Other Income and Expenses Fiscal Year Ended January 31,VarianceDollars(in millions)20242023Losses on strategic investments, net$(277)$(239)$(38)Other income (expense)216 (131)347 Losses on strategic investments, net consists primarily of mark-to-market adjustments related to our publicly held equity securities, observable price adjustments related to our privately held equity securities and other adjustments including impairments. Our strategic investment portfolio continues to be affected by challenging market conditions for companies in which we hold private equity or debt investments, as well as high public equity market volatility. In fiscal 2024 these factors resulted in impairments on privately held equity and debt securities of $466 million, partially offset by $119 million in unrealized gains on privately held equity securities.Other income (expense) primarily consists of interest income on our marketable securities portfolio, which is partially offset by interest expense on our debt as well as our finance leases. Other income (expense) increased primarily due to an increase in investment income from rising interest rates.Benefit From (Provision For) Income Taxes Fiscal Year Ended January 31,VarianceDollars(in millions)20242023Benefit from (provision for) income taxes$(814)$(452)$(362)Effective tax rate16 %68 %We recorded a tax provision of $814 million on pretax income of $5.0 billion for fiscal 2024. Our tax provision increased from a year ago primarily due to higher pretax income. Our effective tax rate decreased from a year ago primarily due to discrete benefits from foreign tax credits attributable to recent IRS notices. Our effective tax rate may fluctuate due to changes in our domestic and foreign earnings, or material discrete tax items, or a combination of these factors resulting from transactions or events, including acquisitions, changes to our operating structure and other macroeconomic factors.In fiscal 2023, we recognized a tax provision of $452 million on a pretax income of $660 million. The majority of the tax provision was related to taxes from profitable jurisdictions outside of the United States which includes withholding taxes.The provision from the Tax Cuts and Jobs Act of 2017 that requires capitalization and amortization of research and development costs became effective in fiscal 2023. This requirement continues to unfavorably impact our tax provision and cash taxes. 50Table of ContentsFiscal Year Ended January 31, 2023 and 2022For a discussion of the year ended January 31, 2023 compared to the year ended January 31, 2022, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended January 31, 2023.Liquidity and Capital ResourcesAt January 31, 2024, our principal sources of liquidity were cash, cash equivalents and marketable securities totaling $14.2 billion and accounts receivable of $11.4 billion. Our cash equivalents and marketable securities are comprised primarily of corporate notes and obligations, U.S. treasury securities, U.S. agency obligations, asset-backed securities, foreign government obligations, mortgage-backed obligations, covered bonds, time deposits, money market mutual funds and municipal securities. Our credit agreement (the “Revolving Loan Credit Agreement”), which as of January 31, 2024, provides the ability to borrow up to $3.0 billion in unsecured financing (the “Credit Facility”), also serves as a source of liquidity. Cash from operations could continue to be affected by various risks and uncertainties, including, but not limited to, the risks detailed in Part I, Item 1A, “Risk Factors.” We believe our existing cash, cash equivalents, marketable securities, cash provided by operating activities, unbilled amounts related to contracted non-cancelable subscription agreements, which are not reflected on the balance sheet, and, if necessary, our borrowing capacity under our Credit Facility will be sufficient to meet our working capital, capital expenditure and debt maintenance needs over the next 12 months. In the future, we may enter into arrangements to acquire or invest in complementary businesses, services and technologies and intellectual property rights. To facilitate these acquisitions or investments, we may seek additional equity or debt financing, which may not be available on terms favorable to us or at all, impacting our ability to complete subsequent acquisitions or investments.Cash FlowsFor fiscal 2024, 2023 and 2022 our cash flows were as follows (in millions):4Fiscal Year Ended January 31, 202420232022Net cash provided by operating activities$10,234 $7,111 $6,000 Net cash used in investing activities(1,327)(1,989)(14,536)Net cash provided by (used in) financing activities(7,477)(3,562)7,838 Operating ActivitiesThe net cash provided by operating activities during fiscal 2024 was primarily comprised of net income of $4.1 billion, adjusted for non-cash items, including $4.0 billion of depreciation and amortization and $2.8 billion of stock-based compensation expense. Cash provided by operating activities can be significantly impacted by factors such as growth in new business, timing of cash receipts from customers, vendor payment terms and timing of payments to vendors. Cash provided by operating activities during fiscal 2024 was further benefited by the change in unearned revenue of $1.6 billion, partially offset by the changes in accounts receivable, net of $659 million and the change in accounts payable and accrued expenses and other liabilities of $478 million. As our business continues to grow, and assuming our expenses remain in line with or less than our revenue growth, we expect to continue to see growth in net cash provided by operating activities.The net cash provided by operating activities during fiscal 2023 was related to net income of $208 million, adjusted for non-cash items including $3.8 billion of depreciation and amortization and $3.3 billion related to stock-based compensation expense. Cash provided by operating activities can be significantly impacted by factors such as growth in new business, timing of cash receipts from customers, vendor payment terms and timing of payments to vendors. Cash provided by operating activities during fiscal 2023 was further benefited by the change in unearned revenue of $1.7 billion, partially offset by the change in costs capitalized to obtain revenue contracts, net of $2.3 billion and accounts receivable, net of $1.0 billion due to cash collections. Cash provided by operating activities was impacted by the provision from the Tax Cuts and Jobs Act of 2017 which became effective in fiscal 2023 and requires the capitalization and amortization of research and development costs. The change increased our cash taxes paid in fiscal 2023. Investing ActivitiesThe net cash used in investing activities during fiscal 2024 was primarily related to capital expenditures of $736 million,  net outflows from strategic investment activity of $388 million, and net outflows related to marketable securities activity of $121 million. 51Table of ContentsThe net cash used in investing activities during fiscal 2023 was primarily related to capital expenditures of $798 million, net outflows of $557 million from marketable securities activity, cash consideration for acquisitions of approximately $439 million and net outflows of $195 million from strategic investment activity.Financing ActivitiesNet cash used in financing activities during fiscal 2024 consisted primarily of $7.6 billion from repurchases of common stock and $1.2 billion related to repayments of debt, partially offset by $2.0 billion from proceeds from equity plans.Net cash used in financing activities during fiscal 2023 consisted primarily of $4.0 billion from repurchases of common stock partially offset by $861 million from proceeds from equity plans.DebtAs of January 31, 2024, we had senior unsecured debt outstanding, with maturities starting in July 2024 and extending through July 2061 with a total carrying value of $9.4 billion, of which $1.0 billion was related to the 2024 Senior Notes due in the next 12 months. We were in compliance with all debt covenants as of January 31, 2024. In December 2020, we entered into the Revolving Loan Credit Agreement, which provides for a $3.0 billion unsecured revolving Credit Facility that matures in December 2025. There were no outstanding borrowings under the Credit Facility as of January 31, 2024. We may use the proceeds of future borrowings under the Credit Facility for general corporate purposes, which may include, without limitation, the consideration, fees, costs and expenses related to any acquisition. In April 2022 and May 2023, we amended the Revolving Loan Credit Agreement to reflect certain immaterial administrative changes.We do not have any special purpose entities and we do not engage in off-balance sheet financing arrangements.Share Repurchase ProgramIn August 2022, the Board authorized a program to repurchase up to $10.0 billion of our common stock (the “Share Repurchase Program”). The Share Repurchase Program does not have a fixed expiration date and does not obligate us to acquire any specific number of shares. In February 2023, the Board authorized an additional $10.0 billion in repurchases under the Share Repurchase Program, for an aggregate total authorization of $20.0 billion. During the fiscal years ended January 31, 2024 and 2023, we repurchased approximately 36 million and 28 million shares of our common stock for approximately $7.7 billion and $4.0 billion at an average cost of $210.30 and $144.94 per share, respectively. All repurchases were made in open market transactions. As of January 31, 2024, we were authorized to purchase a remaining $8.3 billion of the Company’s common stock under the Share Repurchase Program. In February 2024, the Board authorized an additional $10.0 billion in repurchases under the Share Repurchase Program, for an aggregate total authorization of $30.0 billion. Subsequent to January 31, 2024, we have paid approximately $0.5 billion through February 29, 2024 for additional shares under the Share Repurchase Program.The Inflation Reduction Act introduced a new one percent excise tax imposed on certain stock repurchases made after December 31, 2022. The excise tax is assessed on an annual fiscal year basis, reported and paid in the subsequent year. It was applicable to stock repurchases made in fiscal 2024 and impacted in fiscal 2025 by factors such as the Company’s share price. Any excise tax for fiscal 2024 will impact financing cash flows.Cash DividendOn February 28, 2024, we announced a quarterly dividend policy and the declaration of our first-ever cash dividend. This cash dividend of $0.40 per share of the Company’s outstanding common stock will be paid on April 11, 2024 to stockholders of record as of the close of business on March 14, 2024. The payment of future cash dividends is subject to future declaration by our Board, which will be based in part on continued capital availability, general economic and market conditions, applicable laws and agreements and our Board continuing to determine that the declaration of dividends is in the best interests of the Company and its stockholders. Contractual ObligationsOur principal commitments consist of obligations under leases for office space, co-location data center facilities and our development and test data center, as well as leases for computer equipment, software, furniture and fixtures. As of January 31, 2024, the future non-cancelable minimum payments under these commitments were approximately $4.6 billion, with payments of $1.0 billion due in the next 12 months and $3.6 billion due thereafter. As of January 31, 2024, we have additional operating leases that have not yet commenced totaling $77 million. In addition to our leasing arrangements, we have other contractual commitments associated with agreements that are enforceable and legally binding, including those with infrastructure service providers. As of January 31, 2024, our total commitments under these agreements were approximately $16.8 billion, of which payments of $2.2 billion are due in the next 12 months and $14.6 billion are due thereafter. We generally expect to satisfy these commitments with cash on hand and cash provided by operating activities. 52Table of ContentsDuring the fiscal 2024 and in future years, we have made, and expect to continue to make, additional investments in our infrastructure to scale our operations to increase productivity and enhance our security measures. We plan to upgrade or replace various internal systems to scale with our overall growth. While we continue to make investments in our infrastructure, including offices, information technology and data centers, as well as investments with infrastructure service providers, to provide capacity for the growth of our business, our strategy may continue to change related to these investments and we may slow the pace of our investments.Other Future ObligationsAs of January 31, 2024, we expect approximately $100 million to $125 million in future cash payments related to our restructuring initiatives, primarily related to workforce costs such as severance payments. We generally expect to satisfy these commitments with cash on hand and cash provided by operating activities. Additionally, as we have utilized the majority of our net operating loss and tax credits carryforward, we expect an increase in cash taxesEnvironmental, Social and GovernanceWe believe that business is the greatest platform for change. By focusing on environmental, social and governance (ESG) excellence, Salesforce strives to be a leading example of an ethical, resilient company delivering value to stakeholders now and in the future. We aim to maintain our public commitments with the highest standards of integrity and transparency, and enable compliance with global ESG regulations.Guided by our values, we work to earn the trust of our stakeholders. Transparency is key to trust, which is why we have published an annual ESG report for over ten years to keep our stakeholders informed and to hold ourselves accountable to our ESG strategy, as well as our key programs, goals, commitments and metrics. Our ESG disclosures are also informed by relevant topics identified through ESG relevancy assessments and third-party ESG reporting organizations, frameworks and standards, such as the Sustainability Accounting Standards Board (“SASB”) Standards and the Task Force on Climate-Related Financial Disclosures (“TCFD”). Read more about these initiatives and view our Stakeholder Impact Report at https://salesforce.com/stakeholder-impact-report. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this report.While we believe that our ESG goals align with our long-term growth strategy and financial and operational priorities, they are aspirational and may change, and there is no guarantee or promise that they will be met.53Table of ContentsITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKWe are exposed to financial market risks, including changes in foreign currency exchange rates, interest rates and equity investment risks. This exposure has increased due to recent financial market movements and changes to our expectations of near-term possible movements caused by the impact of the macroeconomic environment as discussed in more detail below.Foreign Currency Exchange RiskWe primarily conduct our business in the following locations: the United States, Europe, Canada, Latin America, Asia Pacific and Japan. The expanding global scope of our business exposes us to the risk of fluctuations in foreign currency markets, including emerging markets. This exposure is the result of selling in multiple currencies, operating in countries where the functional currency is the local currency and growth in our international investments, including data center expansion, costs associated with third-party infrastructure providers and additional headcount in foreign countries. Specifically, our results of operations and cash flows are subject to fluctuations in the following currencies: the Euro, British Pound Sterling, Japanese Yen, Canadian Dollar, Australian Dollar and Brazilian Real against the United States Dollar (“USD”). These exposures may change over time as business practices evolve and economic conditions change. Changes in foreign currency exchange rates could have an adverse impact on our financial results and cash flows. Foreign Currency Transaction RiskOur foreign currency exposures typically arise from selling annual and multi-year subscriptions in multiple currencies, customer accounts receivable, intercompany transfer pricing arrangements and other intercompany transactions. Our foreign currency management objective is to minimize the effect of fluctuations in foreign exchange rates on selected assets or liabilities without exposing us to additional risk associated with transactions that could be regarded as speculative. We pursue our objective by utilizing foreign currency forward contracts to offset foreign exchange risk. Our foreign currency forward contracts are generally short-term in duration. We neither use these foreign currency forward contracts for trading purposes nor do we currently designate these forward contracts as hedging instruments under the relevant accounting and financial reporting guidelines. Accordingly, we record the fair values of these contracts as of the end of our reporting period to our consolidated balance sheets with changes in fair values recorded to our consolidated statements of operations. Given the short duration of the forward contracts, the amount recorded is not significant. Our ultimate realized gain or loss with respect to foreign currency exposures will generally depend on the size and type of cross-currency transactions that we enter into, the currency exchange rates associated with these exposures and changes in those rates, the net realized gain or loss on our foreign currency forward contracts and other factors. Foreign Currency Translation RiskFluctuations in foreign currencies impact the amount of total assets, liabilities, revenues, operating expenses and cash flows that we report for our foreign subsidiaries upon the translation of these amounts into USD. Total revenue during the fiscal year ended January 31, 2024, was minimally impacted by fluctuations in foreign currencies compared to the fiscal year ended January 31, 2024. In addition, fluctuations in USD against international currencies negatively impacted our current remaining performance obligation by approximately one percent as of January 31, 2024 compared to what we would have reported as of January 31, 2023 using constant currency rates.Interest Rate SensitivityWe had cash, cash equivalents and marketable securities totaling $14.2 billion as of January 31, 2024. This amount was invested primarily in money market funds, time deposits, corporate notes and bonds, government securities and other debt securities with credit ratings of at least BBB or better. The cash, cash equivalents and marketable securities are held for general corporate purposes, including share repurchases, dividend payments, acquisitions of, or investments in, complementary businesses, services or technologies, working capital and capital expenditures. Our investments are made for capital preservation purposes. We do not enter into investments for trading or speculative purposes.Our cash equivalents and our portfolio of marketable securities are subject to market risk due to changes in interest rates. Fixed-rate securities may have their market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fall short of expectations due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities that decline in market value due to changes in interest rates. However, because we classify our debt securities as “available for sale,” no gains or losses are recognized in our consolidated statement of operations due to changes in interest rates. Gains or losses recognized in our consolidated statement of operations are limited to those related to either the sale of securities prior to maturity or expected credit losses. Our fixed-income portfolio is also subject to interest rate risk. An immediate increase or decrease in interest rates of 100 basis points at January 31, 2024 could result in a $63 million market value reduction or increase of the same amount. This estimate is based on a sensitivity model that measures market value changes when changes in interest rates occur. Fluctuations 54Table of Contentsin the value of our investment securities caused by a change in interest rates (gains or losses on the carrying value) are recorded in other comprehensive income, net, and are realized only if we sell the underlying securities.At January 31, 2023, we had cash, cash equivalents and marketable securities totaling $12.5 billion. Changes in interest rates of 100 basis points would have resulted in market value changes of $56 million.Market Risk and Market Interest RiskWe deposit our cash with multiple financial institutions. DebtWe maintain debt obligations that are subject to market interest risk, as follows (in millions): InstrumentMaturity DatePrincipal Outstanding as of January 31, 2024Interest TermsContractual Interest Rate2024 Senior NotesJuly 2024$1,000 Fixed0.625%Credit FacilityDecember 20250 FloatingN/A2028 Senior NotesApril 20281,500 Fixed3.702028 Senior Sustainability NotesJuly 20281,000 Fixed1.502031 Senior NotesJuly 20311,500 Fixed1.952041 Senior NotesJuly 20411,250 Fixed2.702051 Senior NotesJuly 20512,000 Fixed2.902061 Senior NotesJuly 20611,250 Fixed3.05The borrowings under our Credit Facility bear interest, at our option, at a base rate plus a spread of 0.00% to 0.125% or an adjusted benchmark rate plus a spread of 0.50% to 1.125%, in each case with such spread being determined based on our credit rating. We are also obligated to pay an ongoing commitment fee on undrawn amounts. As of January 31, 2024, there was no outstanding borrowing amount under the Credit Facility.The bank counterparties to our derivative contracts potentially expose us to credit-related losses in the event of their nonperformance. To mitigate that risk, we only contract with counterparties who meet the minimum requirements under our counterparty risk assessment process. We monitor ratings, credit spreads and potential downgrades on at least a quarterly basis. Based on our ongoing assessment of counterparty risk, we adjust our exposure to various counterparties. We generally enter into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. However, we do not have any master netting arrangements in place with collateral features.Strategic InvestmentsAs of January 31, 2024, our strategic investment portfolio consisted of investments in over 400 companies with a combined carrying value of $4.8 billion, including two privately held investments with carrying values that were individually greater than five percent of the total strategic investments portfolio and represented 16 percent of the portfolio in aggregate. The following table sets forth additional information regarding active equity investments within our strategic investment portfolio as of January 31, 2024 and excludes exited investments (in millions):Investment Type Capital Invested Unrealized Gains (Cumulative) Unrealized Losses (Cumulative)Carrying Value as of January 31, 2024Publicly held equity securities $27 $53 $0 $80 Privately held equity securities 4,020 1,216 (549)4,687 Total equity securities$4,047 $1,269 $(549)$4,767 Fluctuations in the value of our privately held equity securities are only recorded when there is an observable transaction for a same or similar security of the same issuer, or in the event of impairment. We anticipate additional volatility in our consolidated statement of operations due to these events, as well as changes in the market prices of our publicly held equity securities. We anticipate future volatility in our consolidated statements of operations due to changes in market prices, observable price changes and impairments of our strategic investments. The resulting gains or losses could be material depending on market conditions and events, particularly in periods with economic uncertainty, inflation, volatile public equity markets or unsettled global market conditions. Our investments in privately held equity securities are in various classes of equity with varying rights and preferences. The particular securities we hold, and their rights and preferences relative to other securities within the capital structure, may 55Table of Contentsimpact the magnitude by which our investment value moves in relation to movement in the total enterprise value of the company. As a result, the value of our investment in a specific company may move by more or less than a change in that company’s overall value. Our largest privately held equity securities represent 37 percent of our total strategic investments as of January 31, 2024. If the enterprise value of the companies in which we hold those securities decreased by ten percent, the carrying value of our investment portfolio would have declined by approximately $107 million. We continually evaluate our investments in privately held and publicly traded companies. In certain cases, our ability to sell these investments may be impacted by contractual obligations to hold the securities for a set period of time after a public offering.In addition, the financial success of our investment in any company is typically dependent on a liquidity event, such as a public offering, acquisition or other favorable market event reflecting appreciation to the cost of our initial investment. All of our investments, particularly those in privately held companies, are therefore subject to a risk of partial or total loss of invested capital.56Table of ContentsITEM 8. FINANCIAL STATEMENTSINDEX TO CONSOLIDATED FINANCIAL STATEMENTSThe following financial statements are filed as part of this Annual Report on Form 10-K:Page No.Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42)58Consolidated Balance Sheets60Consolidated Statements of Operations62Consolidated Statements of Comprehensive Income63Consolidated Statements of Stockholders’ Equity64Consolidated Statements of Cash Flows65Notes to Consolidated Financial Statements6757Table of ContentsReport of Independent Registered Public Accounting FirmTo the Stockholders and the Board of Directors of Salesforce, Inc.Opinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Salesforce, Inc. (the Company) as of January 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended January 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2024, in conformity with U.S. generally accepted accounting principles.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 6, 2024 expressed an unqualified opinion thereon. Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.58Table of ContentsRevenue RecognitionDescription of the MatterAs described in Note 1 to the consolidated financial statements, the Company recognizes revenue primarily from subscription and support services and professional services contracts in an amount that reflects the consideration the Company expects to receive in exchange for those products or services.  The Company enters into contracts with its customers that may include promises to transfer multiple cloud services, software licenses, premium support and professional services.  Significant judgment may be required by the Company in determining revenue recognition for these customer agreements, including the determination of whether products and services are considered distinct performance obligations and the determination of standalone selling prices, particularly for products and services that are not sold separately.Auditing the Company’s accounting for revenue contracts with customers required significant judgment to assess management’s determination of performance obligations and standalone selling prices.  How We Addressed the Matter in Our AuditWe obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process to identify performance obligations and allocate the transaction price to those performance obligations, including controls over determining standalone selling prices. To test the Company’s judgments and conclusions related to the identification of performance obligations and determination of standalone selling prices, our audit procedures included, among others, obtaining an understanding of the Company’s various service offerings and evaluating management’s conclusions regarding which were distinct.  We read a sample of executed contracts to assess management’s evaluation of significant terms, including the determination of distinct performance obligations, and the related standalone selling price.  We evaluated the information utilized to determine standalone selling price and we tested the mathematical accuracy of the Company’s calculations.Impairment of Strategic InvestmentsDescription of the MatterAs described in Note 1 to the consolidated financial statements, the Company holds investments in privately held equity securities, which are assessed for impairment at least quarterly.  The Company’s impairment analysis encompasses an assessment of both qualitative and quantitative factors, including the investee's financial metrics, market acceptance of the investee's product or technology and the rate at which the investee is using its cash. Significant judgment may be required by the Company in determining if an investment is impaired based on the information available about the investee.Auditing the Company’s accounting for impairment of privately held equity securities required significant judgment to evaluate management’s assessment of impairment indicators to evaluate whether investments are impaired considering the current economic environment.  How We Addressed the Matter in Our AuditWe obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process to identify impaired privately held equity securities, including controls over assessing impairment indicators. To test the Company’s judgments and conclusions related to impairment of privately held equity securities, our audit procedures included, among others, obtaining an understanding of the nature of the privately held equity securities and evaluating the Company’s assessment of both qualitative and quantitative factors.  We read the Company’s analysis of a sample of investments and available information including financial metrics and cash usage.  We evaluated the information available to determine the appropriateness of the Company’s conclusions of whether the investments are impaired./s/ Ernst & Young LLPWe have served as the Company’s auditor since 2002.San  Francisco, CaliforniaMarch 6, 202459Table of ContentsReport of Independent Registered Public Accounting FirmTo the Stockholders and the Board of Directors of Salesforce, Inc.Opinion on Internal Control Over Financial ReportingWe have audited Salesforce, Inc.’s internal control over financial reporting as of January 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Salesforce, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of January 31, 2024, based on the COSO criteria.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of January 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended January 31, 2024, and the related notes and our report dated March 6, 2024 expressed an unqualified opinion thereon.Basis for OpinionThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.Definition and Limitations of Internal Control Over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLPSan Francisco, CaliforniaMarch 6, 202460Table of ContentsSalesforce, Inc.Consolidated Balance Sheets(in millions)January 31, 2024January 31, 2023AssetsCurrent assets:Cash and cash equivalents$8,472 $7,016 Marketable securities5,722 5,492 Accounts receivable, net 11,414 10,755 Costs capitalized to obtain revenue contracts, net 1,905 1,776 Prepaid expenses and other current assets1,561 1,356 Total current assets29,074 26,395 Property and equipment, net3,689 3,702 Operating lease right-of-use assets, net 2,366 2,890 Noncurrent costs capitalized to obtain revenue contracts, net 2,515 2,697 Strategic investments4,848 4,672 Goodwill48,620 48,568 Intangible assets acquired through business combinations, net5,278 7,125 Deferred tax assets and other assets, net 3,433 2,800 Total assets$99,823 $98,849 Liabilities and stockholders’ equityCurrent liabilities:Accounts payable, accrued expenses and other liabilities$6,111 $6,743 Operating lease liabilities, current 518 590 Unearned revenue 19,003 17,376 Debt, current999 1,182 Total current liabilities26,631 25,891 Noncurrent debt8,427 9,419 Noncurrent operating lease liabilities2,644 2,897 Other noncurrent liabilities 2,475 2,283 Total liabilities40,177 40,490 Commitments and contingencies (See Notes 6 and 14)Stockholders’ equity:Preferred stock, $0.001 par value; 5 shares authorized and none issued and outstanding0 0 Common stock, $0.001 par value; 1,600 shares authorized, 1,035 and 1,009 shares issued as of January 31, 2024 and 2023, respectively, and 971 and 981 shares outstanding as of January 31, 2024 and 2023, respectively1 1 Treasury stock, at cost(11,692)(4,000)Additional paid-in capital59,841 55,047 Accumulated other comprehensive loss(225)(274)Retained earnings11,721 7,585 Total stockholders’ equity59,646 58,359 Total liabilities and stockholders’ equity$99,823 $98,849 See accompanying Notes.61Table of ContentsSalesforce, Inc.Consolidated Statements of Operations (in millions, except per share data)4Fiscal Year Ended January 31, 202420232022Revenues:Subscription and support$32,537 $29,021 $24,657 Professional services and other2,320 2,331 1,835 Total revenues34,857 31,352 26,492 Cost of revenues (1)(2):Subscription and support 6,177 5,821 5,059 Professional services and other 2,364 2,539 1,967 Total cost of revenues8,541 8,360 7,026 Gross profit26,316 22,992 19,466 Operating expenses (1)(2):Research and development4,906 5,055 4,465 Marketing and sales12,877 13,526 11,855 General and administrative2,534 2,553 2,598 Restructuring988 828 0 Total operating expenses21,305 21,962 18,918 Income from operations5,011 1,030 548 Gains (losses) on strategic investments, net (277)(239)1,211 Other income (expense)216 (131)(227)Income before provision for income taxes4,950 660 1,532 Provision for income taxes (814)(452)(88)Net income$4,136 $208 $1,444 Basic net income per share$4.25 $0.21 $1.51 Diluted net income per share$4.20 $0.21 $1.48 Shares used in computing basic net income per share974 992 955 Shares used in computing diluted net income per share984 997 974 (1) Amounts include amortization of intangible assets acquired through business combinations, as follows:Fiscal Year Ended January 31,202420232022Cost of revenues$978 $1,035 $897 Marketing and sales891 916 727 (2) Amounts include stock-based compensation expense, as follows: Fiscal Year Ended January 31, 202420232022Cost of revenues$431 $499 $386 Research and development972 1,136 918 Marketing and sales1,062 1,256 1,104 General and administrative299 368 371 Restructuring 23 20 0 See accompanying Notes.62Table of ContentsSalesforce, Inc.Consolidated Statements of Comprehensive Income (in millions)4Fiscal Year Ended January 31,202420232022Net income$4,136 $208 $1,444 Other comprehensive income (loss), net of reclassification adjustments:Foreign currency translation and other losses(11)(35)(55)Unrealized gains (losses) on marketable securities and privately held debt securities83 (94)(83)Other comprehensive income (loss), before tax72 (129)(138)Tax effect(23)21 14 Other comprehensive income (loss), net49 (108)(124)Comprehensive income$4,185 $100 $1,320 See accompanying Notes.63Table of ContentsSalesforce, Inc.Consolidated Statements of Stockholders’ Equity(in millions) Common StockTreasury StockAdditionalPaid-inCapitalAccumulated Other Comprehensive Income/(Loss)Retained EarningsTotalStockholders’Equity SharesAmountSharesAmountBalance at January 31, 2021919 $1 0 $0 $35,601 $(42)$5,933 $41,493 Common stock issued24 0 0 0 1,270 0 0 1,270 Shares issued related to business combinations46 0 0 0 11,269 0 0 11,269 Stock-based compensation0 0 0 0 2,779 0 0 2,779 Other comprehensive loss, net of tax0 0 0 0 0 (124)0 (124)Net income0 0 0 0 0 0 1,444 1,444 Balance at January 31, 2022989 1 0 0 50,919 (166)7,377 58,131 Common stock issued20 0 0 0 849 0 0 849 Common stock repurchased0 0 (28)(4,000)0 0 0 (4,000)Stock-based compensation0 0 0 0 3,279 0 3,279 Other comprehensive loss, net of tax0 0 0 0 0 (108)0 (108)Net income0 0 0 0 0 0 208 208 Balance at January 31, 20231,009 1 (28)(4,000)55,047 (274)7,585 58,359 Common stock issued26 0 0 0 1,994 0 0 1,994 Common stock repurchased0 0 (36)(7,692)0 0 0 (7,692)Stock-based compensation0 0 0 0 2,800 0 0 2,800 Other comprehensive income, net of tax 0 0 0 0 0 49 0 49 Net income0 0 0 0 0 0 4,136 4,136 Balance at January 31, 20241,035 1 (64)(11,692)59,841 (225)11,721 59,646 See accompanying Notes.64Table of ContentsSalesforce, Inc.Consolidated Statements of Cash Flows(in millions)4Fiscal Year Ended January 31,202420232022Operating activities:Net income$4,136 $208 $1,444 Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization (1)3,959 3,786 3,298 Amortization of costs capitalized to obtain revenue contracts, net1,925 1,668 1,348 Stock-based compensation expense2,787 3,279 2,779 (Gains) losses on strategic investments, net277 239 (1,211)Changes in assets and liabilities, net of business combinations:Accounts receivable, net(659)(995)(1,824)Costs capitalized to obtain revenue contracts, net(1,872)(2,345)(2,283)Prepaid expenses and other current assets and other assets(843)(302)114 Accounts payable and accrued expenses and other liabilities (478)528 507 Operating lease liabilities(621)(699)(801)Unearned revenue1,623 1,744 2,629 Net cash provided by operating activities10,234 7,111 6,000 Investing activities:Business combinations, net of cash acquired(82)(439)(14,876)Purchases of strategic investments(496)(550)(1,718)Sales of strategic investments108 355 2,201 Purchases of marketable securities(3,761)(4,777)(5,674)Sales of marketable securities1,511 1,771 4,179 Maturities of marketable securities2,129 2,449 2,069 Capital expenditures(736)(798)(717)Net cash used in investing activities(1,327)(1,989)(14,536)Financing activities:Proceeds from issuance of debt, net of issuance costs0 0 7,906 Repayments of Slack Convertible Notes, net of capped call proceeds0 0 (1,197)Repurchases of common stock(7,620)(4,000)0 Proceeds from employee stock plans1,954 861 1,289 Principal payments on financing obligations (629)(419)(156)Repayments of debt(1,182)(4)(4)Net cash provided by (used in) financing activities(7,477)(3,562)7,838 Effect of exchange rate changes26 (8)(33)Net increase (decrease) in cash and cash equivalents1,456 1,552 (731)Cash and cash equivalents, beginning of period7,016 5,464 6,195 Cash and cash equivalents, end of period$8,472 $7,016 $5,464 (1)    Includes amortization of intangible assets acquired through business combinations, depreciation of fixed assets and amortization and impairment of right-of-use assets. See accompanying Notes.65Table of ContentsSalesforce, Inc.Consolidated Statements of Cash FlowsSupplemental Cash Flow Disclosure(in millions) Fiscal Year Ended January 31, 202420232022Supplemental cash flow disclosure:Cash paid during the period for:Interest$254 $275 $187 Income taxes, net of tax refunds$1,027 $510 $196 Non-cash investing and financing activities:Fair value of equity awards assumed$0 $7 $205 Fair value of common stock issued as consideration for business combinations$0 $0 $11,064 See accompanying Notes.66Table of ContentsSalesforce, Inc.Notes to Consolidated Financial Statements1. Summary of Business and Significant Accounting PoliciesDescription of BusinessSalesforce, Inc. (the “Company”) is a global leader in customer relationship management technology that brings companies and customers together. With the Customer 360 platform, the Company delivers a single source of truth, connecting customer data with integrated artificial intelligence across systems, apps and devices to help companies sell, service, market and conduct commerce from anywhere. Since its founding in 1999, Salesforce has pioneered innovations in cloud, mobile, social, analytics and artificial intelligence, enabling companies of every size and industry to transform their businesses in the all-digital, work-from-anywhere era.Fiscal YearThe Company’s fiscal year ends on January 31. References to fiscal 2024, for example, refer to the fiscal year ending January 31, 2024.Use of EstimatesThe preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in the Company’s consolidated financial statements and notes thereto.Significant estimates and assumptions made by management include the determination of:•the standalone selling price (“SSP”) of performance obligations for revenue contracts with multiple performance obligations;•the valuation of privately-held strategic investments;•the fair value of assets acquired and liabilities assumed for business combinations;•the recognition, measurement and valuation of current and deferred income taxes and uncertain tax positions;•the useful lives of intangible assets; and•the fair value of certain stock awards issued.Actual results could differ materially from these estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, which forms the basis for making judgments about the carrying values of assets and liabilities as well as income and expenses to be recognized. Principles of ConsolidationThe consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.SegmentsThe Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. Over the past few years, the Company has completed a number of acquisitions which have allowed the Company to expand its offerings, presence and reach in various market segments of the enterprise cloud computing market. While the Company has offerings in multiple enterprise cloud computing market segments, including as a result of the Company's acquisitions, and operates in multiple countries, the Company’s business operates in one operating segment because most of the Company's service offerings operate on the Customer 360 Platform and are deployed in a nearly identical manner, and the Company’s CODM evaluates the Company’s financial information and resources, and assesses the performance of these resources, on a consolidated basis. Concentrations of Credit Risk, Significant Customers and InvestmentsThe Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable. The Company monitors and manages the overall exposure of its cash balances to individual financial institutions on an ongoing basis. The Company’s marketable securities portfolio consists primarily of investment-grade securities, and the Company’s policies limit the amount of credit exposure to any one issuer. The Company does not require collateral for accounts receivable. The Company maintains an allowance for its doubtful accounts receivable for estimated credit losses. This allowance is based upon historical loss patterns, the number of days that billings are past due, an evaluation of the potential risk of loss associated with delinquent accounts and current market conditions and 67Table of Contentsreasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss patterns. The Company records the allowance against bad debt expense through the consolidated statements of operations, included in general and administrative expense, up to the amount of revenues recognized to date. Any incremental allowance is recorded as an offset to unearned revenue on the consolidated balance sheets. Receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success. No single customer accounted for five percent or more of accounts receivable as of January 31, 2024 and January 31, 2023. No single customer accounted for five percent or more of total revenue during fiscal 2024, 2023 and 2022. As of January 31, 2024 and January 31, 2023, assets located outside the Americas were 16 percent and 15 percent of total assets, respectively. As of January 31, 2024 and January 31, 2023, assets located in the United States were 82 percent and 83 percent of total assets, respectively.The Company is also exposed to concentrations of risk in its strategic investment portfolio, including within specific industries, as the Company primarily invests in enterprise cloud companies, technology startups and system integrators. As of January 31, 2024 and 2023, the Company held two investments, both privately held, with carrying values that were individually greater than five percent of its total strategic investments portfolio and represented 16 percent of the portfolio in aggregate. Revenue RecognitionThe Company derives its revenues from two sources: (1) subscription and support revenues and (2) professional services and other revenues. Subscription and support revenues include subscription fees from customers accessing the Company’s enterprise cloud computing services (collectively, “Cloud Services”), software license revenues from the sales of term software licenses and support revenues from the sales of support and updates beyond the basic subscription or software license sales. Professional services and other revenues include professional and advisory services for process mapping, project management and implementation services and training services.Revenue is recognized upon transfer of control of promised products and services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. If the consideration promised in a contract includes a variable amount, for example, overage fees, contingent fees or service level penalties, the Company includes an estimate of the amount it expects to receive for the total transaction price if it is probable that a significant reversal of cumulative revenue recognized will not occur.The Company determines the amount of revenue to be recognized through the application of the following steps:•identification of the contract, or contracts, with a customer;•identification of the performance obligations in the contract;•determination of the transaction price;•allocation of the transaction price to the performance obligations in the contract; and•recognition of revenue when or as the Company satisfies the performance obligations.Subscription and Support RevenuesSubscription and support revenues are comprised of fees that provide customers with access to Cloud Services, software licenses and related support and updates during the term of the arrangement. Cloud Services allow customers to use the Company's multi-tenant software without taking possession of the software. Revenue is generally recognized ratably over the contract term. Substantially all of the Company’s subscription service arrangements are non-cancelable and do not contain refund-type provisions.Subscription and support revenues also include revenues associated with term software licenses that provide the customer with a right to use the software as it exists when made available. Revenues from term software licenses are generally recognized at the point in time when the software is made available to the customer. Revenue from software support and updates is recognized as the support and updates are provided, which is generally ratably over the contract term.The Company typically invoices its customers annually and its payment terms provide that customers pay within 30 days of invoice. Amounts that have been invoiced are recorded in accounts receivable and in unearned revenue or revenue, depending on whether transfer of control to customers has occurred.Professional Services and Other RevenuesThe Company’s professional services contracts are either on a time and materials, fixed price or subscription basis. These revenues are recognized as the services are rendered for time and materials contracts, on a proportional performance basis for fixed price contracts or ratably over the contract term for subscription professional services contracts. Other revenues consist primarily of training revenues recognized as such services are performed.68Table of ContentsSignificant Judgments - Contracts with Multiple Performance ObligationsThe Company enters into contracts with its customers that may include promises to transfer multiple performance obligations such as Cloud Services, software licenses, support and updates and professional services. A performance obligation is a promise in a contract with a customer to transfer products or services that are concluded to be distinct. Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require significant judgment.Cloud Services, software licenses and support and updates services are generally concluded to be distinct because such offerings are often sold separately. In determining whether professional services are distinct, the Company considers the following factors for each professional services agreement: availability of the services from other vendors, the nature of the professional services, the timing of when the professional services contract was signed in comparison to the subscription start date and the contractual dependence of the service on the customer’s satisfaction with the professional services work. To date, the Company has concluded that professional services included in contracts with multiple performance obligations are distinct.The Company allocates the transaction price to each performance obligation on a relative SSP basis. The SSP is the price at which the Company would sell a promised product or service separately to a customer. Judgment is required to determine the SSP for each distinct performance obligation.The Company determines SSP by considering its overall pricing objectives and market conditions. Significant pricing practices taken into consideration include the Company’s discounting practices, the size and volume of the Company’s transactions, the customer demographic, the geographic area where services are sold, price lists, the Company's go-to-market strategy, historical and current sales and contract prices. In instances where the Company does not sell or price a product or service separately, the Company maximizes the use of observable inputs by using information that may include market conditions. As the Company’s go-to-market strategies evolve, the Company may modify its pricing practices in the future, which could result in changes to SSP.In certain cases, the Company is able to establish SSP based on observable prices of products or services sold or priced separately in comparable circumstances to similar customers. The Company uses a single amount to estimate SSP when indicated by the distribution of its observable prices.Alternatively, the Company uses a range of amounts to estimate SSP when the pricing practices or distribution of the observable prices are highly variable. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customer size and geography.Costs Capitalized to Obtain Revenue ContractsThe Company capitalizes incremental costs of obtaining revenue contracts related to non-cancelable Cloud Services subscription, ongoing Cloud Services support and license support and updates. For contracts with on-premises software licenses where revenue is recognized upfront when the software is made available to the customer, costs allocable to those licenses are expensed as they are incurred. Capitalized amounts consist primarily of sales commissions paid to the Company’s direct sales force. Capitalized amounts also include (1) amounts paid to employees other than the direct sales force who earn incentive payouts under annual compensation plans that are tied to the value of contracts acquired, (2) commissions paid to employees upon renewals of subscription and support contracts, (3) the associated payroll taxes and fringe benefit costs associated with the payments to the Company’s employees and (4) to a lesser extent, success fees paid to partners in emerging markets where the Company has a limited presence. Costs capitalized related to new revenue contracts are amortized on a straight-line basis over four years, which is longer than the typical initial contract period, but reflects the estimated average period of benefit, including expected contract renewals. In arriving at this average period of benefit, the Company evaluates both qualitative and quantitative factors which included the estimated life cycles of its offerings and its customer attrition. Additionally, the Company amortizes capitalized costs for renewals and success fees paid to partners over two years. The capitalized amounts are recoverable through future revenue streams under all non-cancelable customer contracts. The Company periodically evaluates whether there have been any changes in its business, the market conditions in which it operates or other events which would indicate that its amortization period should be changed or if there are potential indicators of impairment. Amortization of capitalized costs to obtain revenue contracts is included in marketing and sales expense in the accompanying consolidated statements of operations. There were no impairments of costs to obtain revenue contracts for fiscal 2024 and 2023. Cash and Cash EquivalentsThe Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are stated at fair value.69Table of ContentsMarketable SecuritiesThe Company considers all of its marketable debt securities as available for use in current operations, including those with maturity dates beyond one year, and therefore classifies these securities within current assets on the consolidated balance sheets. Securities are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the consolidated statements of comprehensive income until realized. Fair value is determined based on quoted market rates when observable or utilizing data points that are observable, such as quoted prices, interest rates and yield curves. Securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of the excess, if any, is caused by expected credit losses. Expected credit losses on securities are recognized in other income (expense) on the consolidated statements of operations, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income in stockholders' equity. For the purposes of computing realized and unrealized gains and losses, the cost of securities sold is based on the specific-identification method. Interest on securities classified as available for sale is included as a component of investment income within other income (expense) on the consolidated statements of operations.Strategic InvestmentsThe Company holds strategic investments in privately held debt and equity securities and publicly held equity securities in which the Company does not have a controlling interest. Privately held equity securities where the Company lacks a controlling financial interest but does exercise significant influence are accounted for under the equity method. Privately held equity securities not accounted for under the equity method are recorded at cost and adjusted only for observable transactions for same or similar investments of the same issuer or impairment events (referred to as the measurement alternative). All gains and losses on privately held equity securities, realized and unrealized, are recorded through gains (losses) on strategic investments, net on the consolidated statements of operations. Privately held debt securities are recorded at fair value with changes in fair value recorded through accumulated other comprehensive loss on the consolidated balance sheet.Valuations of privately held securities are inherently complex and require judgment due to the lack of readily available market data. In determining the estimated fair value of its strategic investments in privately held companies, the Company utilizes the most recent data available to the Company. The Company assesses its privately held debt and equity securities in its strategic investment portfolio at least quarterly for impairment. The Company’s impairment analysis encompasses an assessment of both qualitative and quantitative factors, including the investee's financial metrics, market acceptance of the investee's product or technology and the rate at which the investee is using its cash. If the investment is considered impaired, the Company estimates the fair value of the investment and recognizes any resulting impairment through the consolidated statements of operations.Publicly held equity securities are measured at fair value with changes recorded through gains (losses) on strategic investments, net on the consolidated statements of operations.The Company may enter into strategic investments or other investments that are considered variable interest entities (“VIEs”). If the Company is a primary beneficiary of a VIE, it is required to consolidate the entity. To determine if the Company is the primary beneficiary of a VIE, the Company evaluates whether it has (1) the power to direct the activities that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The assessment of whether the Company is the primary beneficiary of its VIE investments requires significant assumptions and judgments. VIEs that are not consolidated are accounted for under the measurement alternative, equity method, amortized cost, or other appropriate methodology based on the nature of the interest held. The Company did not consolidate any VIEs as of January 31, 2024 and January 31, 2023.Fair Value MeasurementThe Company measures its cash and cash equivalents, marketable securities, publicly held equity securities and foreign currency derivative contracts at fair value. In addition, the Company measures certain of its strategic investments, including its privately held debt securities and privately held equity securities, at fair value on a nonrecurring basis when there has been an observable price change in a same or similar security or an impairment. The additional disclosures regarding the Company’s fair value measurements are included in Note 4 “Fair Value Measurement.”Derivative Financial InstrumentsThe Company enters into foreign currency derivative contracts with financial institutions to reduce foreign exchange risk associated with intercompany transactions and other monetary assets or liabilities denominated in currencies other than the functional currency of a subsidiary. The Company uses forward currency derivative contracts, which are not designated as hedging instruments, to minimize the Company’s exposure to balances primarily denominated in the Euro, British Pound Sterling, Canadian Dollar, Australian Dollar, Brazilian Real and Japanese Yen. The Company’s derivative financial instruments 70Table of Contentsprogram is not designated for trading or speculative purposes. The Company generally enters into master netting arrangements with the financial institutions with which it contracts for such derivatives, which permit net settlement of transactions with the same counterparty, thereby reducing risk of credit-related losses from a financial institutions' nonperformance. While the contract or notional amount is often used to express the volume of foreign currency derivative contracts, the amounts potentially subject to credit risk are generally limited to the amounts, if any, by which the counterparties’ obligations under the agreements exceed the obligations of the Company to the counterparties. The notional amount of foreign currency derivative contracts as of January 31, 2024 and January 31, 2023 was $8.6 billion and $6.0 billion, respectively. Outstanding foreign currency derivative contracts are recorded at fair value on the consolidated balance sheets. Unrealized gains or losses due to changes in the fair value of these derivative contracts, as well as realized gains or losses from their net settlement, are recognized as other income (expense) consistent with the offsetting gains or losses resulting from the remeasurement or settlement of the underlying foreign currency denominated receivables and payables.Property and EquipmentProperty and equipment are stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of those assets as follows:Buildings and building improvements10 to 40 yearsComputers, equipment and software3 to 5 yearsFurniture and fixtures5 yearsLeasehold improvementsShorter of the estimated lease term or 10 yearsThe Company estimates the useful lives of property and equipment upon initial recognition and periodically evaluates the useful lives and whether events or changes in circumstances warrant a revision to the useful lives.When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from their respective accounts and any loss on such retirement is reflected in operating expenses.Leases The Company determines if an arrangement is a lease at inception and classifies its leases at commencement. Operating leases are included in operating lease right-of-use (“ROU”) assets and current and noncurrent operating lease liabilities on the Company’s consolidated balance sheets. Assets (also referred to as ROU assets) and liabilities recognized from finance leases are included in property and equipment, accrued expenses and other liabilities and other noncurrent liabilities, respectively, on the Company’s consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term. The corresponding lease liabilities represent its obligation to make lease payments arising from the lease. The Company does not recognize ROU assets or lease liabilities for leases with a term of 12 months or less for any asset classes.Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement, net of any future tenant incentives. The Company has lease agreements which contain both lease and non-lease components, which it has elected to combine for all asset classes. As such, minimum lease payments include fixed payments for non-lease components within a lease agreement, but exclude variable lease payments not dependent on an index or rate, such as common area maintenance, operating expenses, utilities, or other costs that are subject to fluctuation from period to period. The Company’s lease terms may include options to extend or terminate the lease. Periods beyond the noncancellable term of the lease are included in the measurement of the lease liability only when it is reasonably certain that the Company will exercise the associated extension option or waive the termination option. The Company reassesses the lease term if and when a significant event or change in circumstances occurs within the control of the Company. As most of the Company’s leases do not provide an implicit rate, the net present value of future minimum lease payments is determined using the Company’s incremental borrowing rate. The Company's incremental borrowing rate is an estimate of the interest rate the Company would have to pay to borrow on a collateralized basis with similar terms and payments, in the economic environment where the leased asset is located.The lease ROU asset is recognized based on the lease liability, adjusted for any rent payments or initial direct costs incurred or tenant incentives received prior to commencement. Lease expense for operating leases, which includes amortization expense of ROU assets, is recognized on a straight-line basis over the lease term. Amortization expense of finance lease ROU assets is recognized on a straight-line basis over the lease term, and interest expense for finance lease liabilities is recognized based on the incremental borrowing rate. Expense for variable lease payments are recognized as incurred.On the lease commencement date, the Company also establishes assets and liabilities for the present value of estimated future costs to retire long-lived assets at the termination or expiration of a lease. Such assets are included in property and equipment, net and are amortized over the lease term.71Table of ContentsThe Company has entered into subleases or has made decisions and taken actions to exit and sublease certain unoccupied leased office space. Similar to other long-lived assets discussed below, management tests ROU assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. For leased assets, such circumstances would include the decision to leave a leased facility prior to the end of the minimum lease term or subleases for which estimated cash flows do not fully cover the costs of the associated lease.Intangible Assets Acquired through Business CombinationsIntangible assets are amortized over their estimated useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization.Impairment AssessmentThe Company evaluates intangible assets and other long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. This includes but is not limited to significant adverse changes in business climate, market conditions or other events that indicate an asset's carrying amount may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate. If the undiscounted cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value. The Company evaluates and tests the recoverability of its goodwill for impairment at least annually during its fourth quarter of each fiscal year or more often if and when circumstances indicate that goodwill may not be recoverable. Business CombinationsThe Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions, tax-related valuation allowances and pre-acquisition contingencies are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of operations.In the event the Company acquires an entity with which the Company has a preexisting relationship, the Company will generally recognize a gain or loss to settle that relationship as of the acquisition date within operating income on the consolidated statements of operations. In the event that the Company acquires an entity in which the Company previously held a strategic investment, the difference between the fair value of the shares as of the date of the acquisition and the carrying value of the strategic investment is recorded as a gain or loss and recorded within net gains (losses) on strategic investments in the consolidated statements of operations.Restructuring The Company generally recognizes employee severance costs when payments are probable and amounts are estimable or when notification occurs, depending on the region an employee works. Costs related to contracts without future benefit or contract termination are recognized at the earlier of the contract termination or the cease-use dates. Other exit-related costs are recognized as incurred. Stock-Based Compensation ExpenseStock-based compensation expense is measured based on grant date at fair value using the Black-Scholes option pricing model for stock options and the grant date closing stock price for restricted stock awards. The Company recognizes stock-based compensation expense related to stock options and restricted stock awards on a straight-line basis, net of estimated forfeitures, over the requisite service period of the awards, which is generally the vesting term of four years. The estimated forfeiture rate applied is based on historical forfeiture rates.Stock-based compensation expense related to the Company’s Amended and Restated 2004 Employee Stock Purchase Plan (“ESPP” or “2004 Employee Stock Purchase Plan”) is measured based on grant date at fair value using the Black-Scholes option pricing model. The Company recognizes stock-based compensation expense related to shares issued pursuant to the 2004 Employee Stock Purchase Plan on a straight-line basis over the offering period, which is 12 months. The ESPP allows employees to purchase shares of the Company's common stock at a 15 percent discount from the lower of the Company’s stock price on (i) the first day of the offering period or on (ii) the last day of the purchase period. The ESPP also allows employees to 72Table of Contentsreduce their percentage election once during a six-month purchase period (December 15 and June 15 of each fiscal year), but not to increase that election until the next one-year offering period. The ESPP includes a reset provision for the purchase price if the stock price on the purchase date is less than the stock price on the offering date.The Company, at times, grants performance share awards to executive officers and other members of senior management, which may include a market condition, performance condition, or both. Stock-based compensation expense related to awards with a market condition are measured at fair value using a Monte Carlo simulation model and the expense related to these awards is recognized on a straight-line basis, net of estimated forfeitures, over the requisite service period of the awards, which is generally the vesting term. Stock-based compensation expense related to awards with a performance condition are measured based on the grant date closing stock price and the expense related to these awards is recognized based on the requisite service period elapsed, as well as the probability of achievement and estimated attainment of the performance condition as of the end of our reporting period.The Company, at times, grants unvested restricted shares to employee stockholders of certain acquired companies in lieu of cash consideration. These awards are generally subject to continued post-acquisition employment. Therefore, the Company accounts for them as post-acquisition stock-based compensation expense. The Company recognizes stock-based compensation expense equal to the grant date fair value of the restricted stock awards, based on the closing stock price on grant date, on a straight-line basis over the requisite service period of the awards, which is generally four years. Advertising ExpensesAdvertising is expensed as incurred. Advertising expense was $1.1 billion, $1.0 billion and $1.0 billion for fiscal 2024, 2023 and 2022, respectively.Income TaxesThe Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax laws is recognized in the consolidated statements of operations in the period that includes the enactment date.The Company’s tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority, solely based on its technical merits. The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in the income tax provision.Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized based on the weighting of positive and negative evidence. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character (for example, ordinary income or capital gain) within the carryback or carryforward periods available under the applicable tax law. The Company regularly reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. The Company’s judgments regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute its business plans. Should there be a change in the ability to recover deferred tax assets, the tax provision would increase or decrease in the period in which the assessment is changed.Foreign Currency TranslationThe functional currency of the Company’s major foreign subsidiaries is generally the local currency. All assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at the average exchange rate during the period. Equity transactions are translated using historical exchange rates. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are recorded as a separate component on the consolidated statements of comprehensive income. Foreign currency transaction gains and losses are included in other income (expense) in the consolidated statements of operations for the period. Warranties and IndemnificationThe Company’s enterprise cloud computing services are typically warranted to perform in a manner consistent with general industry standards that are reasonably applicable and materially in accordance with the Company’s online help documentation under normal use and circumstances.The Company’s arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe a third party’s intellectual property rights. To date, the Company has not incurred any material 73Table of Contentscosts as a result of such obligations and has not accrued any material liabilities related to such obligations in the accompanying consolidated financial statements.The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by the Company, arising out of that person’s services as the Company’s director or officer or that person’s services provided to any other company or enterprise at the Company’s request. The Company maintains director and officer insurance coverage that would generally enable the Company to recover a portion of any future amounts paid. The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.New Accounting Pronouncement Pending AdoptionIn November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires additional operating segment disclosures in annual and interim consolidated financial statements. ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and for interim periods beginning after December 15, 2024 on a retrospective basis, with early adoption permitted. The Company is evaluating the effect of adopting ASU 2023-07.In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a retrospective or prospective basis. The Company is evaluating the effect of adopting ASU 2023-09.2. RevenuesDisaggregation of RevenueSubscription and Support Revenue by the Company's Service OfferingsSubscription and support revenues consisted of the following (in millions): Fiscal Year Ended January 31, 202420232022Sales $7,580 $6,831 $5,989 Service 8,245 7,369 6,474 Platform and Other 6,611 5,967 4,509 Marketing and Commerce4,912 4,516 3,902 Integration and Analytics (1) 5,189 4,338 3,783 $32,537 $29,021 $24,657 (1) In the fourth quarter of fiscal 2024, the Company renamed the service offering previously referred to as Data to Integration and Analytics, which includes Mulesoft and Tableau. Total Revenue by Geographic LocationsRevenues by geographical region consisted of the following (in millions): Fiscal Year Ended January 31, 202420232022Americas$23,289 $21,250 $17,983 Europe8,128 7,163 6,016 Asia Pacific3,440 2,939 2,493 $34,857 $31,352 $26,492 Revenues by geography are determined based on the region of the Company's contracting entity, which may be different than the region of the customer. Americas revenue attributed to the United States was approximately 93 percent, 93 percent and 94 percent during fiscal 2024, 2023 and 2022, respectively. No other country represented more than ten percent of total revenue during fiscal 2024, 2023 and 2022.74Table of ContentsContract BalancesContract AssetsThe Company records a contract asset when revenue recognized on a contract exceeds the billings. Contract assets were $758 million as of January 31, 2024 as compared to $648 million as of January 31, 2023, and are included in prepaid expenses and other current assets and deferred tax assets and other assets, net on the consolidated balance sheets. Unearned RevenueUnearned revenue represents amounts that have been invoiced in advance of revenue recognition and is recognized as revenue when transfer of control to customers has occurred or services have been provided. The unearned revenue balance does not represent the total contract value of annual or multi-year, non-cancelable subscription agreements. The unearned revenue balance is influenced by several factors, including seasonality, the compounding effects of renewals, invoice duration, invoice timing, dollar size and new business linearity within the quarter.The change in unearned revenue was as follows (in millions):Fiscal Year Ended January 31,20242023Unearned revenue, beginning of period$17,376 $15,628 Billings and other (1)36,370 33,034 Contribution from contract asset110 62 Revenue recognized over time(32,727)(29,595)Revenue recognized at a point in time(2,130)(1,757)Unearned revenue from business combinations4 4 Unearned revenue, end of period$19,003 $17,376 (1) Other includes, for example, the impact of foreign currency translation.Revenue recognized over time primarily includes Cloud Services subscription and support revenue, which is generally recognized ratably over time, and professional services and other revenue, which is generally recognized ratably or as delivered.Revenue recognized at a point in time substantially consists of on-premises software licenses.Approximately 49 percent of total revenue recognized in fiscal 2024 is from the unearned revenue balance as of January, 31, 2023.Remaining Performance Obligation Remaining performance obligation represents contracted revenue that has not yet been recognized and includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. Transaction price allocated to the remaining performance obligation is based on SSP. Remaining performance obligation is influenced by several factors, including seasonality, the timing of renewals, the timing of software license deliveries, average contract terms and foreign currency exchange rates. Remaining performance obligation is also impacted by acquisitions. Unbilled portions of the remaining performance obligation denominated in foreign currencies are revalued each period based on the period end exchange rates. Remaining performance obligation is subject to future economic risks, including bankruptcies, regulatory changes and other market factors.The Company excludes amounts related to performance obligations from professional services contracts that are billed and recognized on a time and materials basis. The majority of the Company's noncurrent remaining performance obligation is expected to be recognized in the next 13 to 36 months.Remaining performance obligation consisted of the following (in billions): CurrentNoncurrentTotalAs of January 31, 2024$27.6 $29.3 $56.9 As of January 31, 2023 $24.6 $24.0 $48.6 75Table of Contents3. InvestmentsMarketable SecuritiesAt January 31, 2024, marketable securities consisted of the following (in millions):AmortizedCostUnrealizedGainsUnrealizedLossesFair ValueCorporate notes and obligations$3,014 $9 $(45)$2,978 U.S. treasury securities583 0 (8)575 Mortgage-backed obligations244 1 (9)236 Asset-backed securities1,381 5 (7)1,379 Municipal securities139 0 (3)136 Commercial paper213 0 0 213 Covered bonds81 0 (3)78 Other127 1 (1)127 Total marketable securities$5,782 $16 $(76)$5,722 At January 31, 2023, marketable securities consisted of the following (in millions):AmortizedCostUnrealizedGainsUnrealizedLossesFair ValueCorporate notes and obligations$3,442 $4 $(92)$3,354 U.S. treasury securities381 0 (11)370 Mortgage-backed obligations190 0 (12)178 Asset-backed securities1,004 1 (20)985 Municipal securities175 0 (6)169 Commercial paper278 0 0 278 Covered bonds105 0 (4)101 Other59 0 (2)57 Total marketable securities$5,634 $5 $(147)$5,492 The contractual maturities of the investments classified as marketable securities were as follows (in millions): As of January 31, 2024January 31, 2023Due within 1 year$2,523 $2,380 Due in 1 year through 5 years3,180 3,104 Due in 5 years through 10 years19 8 $5,722 $5,492 Strategic InvestmentsStrategic investments by form and measurement category as of January 31, 2024 were as follows (in millions):  Measurement Category Fair ValueMeasurement AlternativeOtherTotalEquity securities$80 $4,557 $130 $4,767 Debt securities and other investments 0 0 81 81 Balance as of January 31, 2024$80 $4,557 $211 $4,848 76Table of ContentsStrategic investments by form and measurement category as of January 31, 2023 were as follows (in millions):  Measurement Category Fair ValueMeasurement AlternativeOtherTotalEquity securities$48 $4,479 $76 $4,603 Debt securities and other investments0 0 69 69 Balance as of January 31, 2023$48 $4,479 $145 $4,672 The Company holds investments in, or management agreements with, VIEs which the Company does not consolidate because it is not considered the primary beneficiary of these entities. The carrying value of VIEs within strategic investments was $382 million and $354 million, as of January 31, 2024 and January 31, 2023, respectively. Gains (Losses) on Strategic Investments, Net The components of gains and losses on strategic investments were as follows (in millions): 4Fiscal Year Ended January 31,202420232022Unrealized gains (losses) recognized on publicly traded equity securities, net$29 $1 $(241)Unrealized gains recognized on privately held equity securities, net119 180 1,210 Impairments on privately held equity and debt securities(466)(491)(51)Unrealized gains (losses), net(318)(310)918 Realized gains on sales of securities, net41 71 293 Gains (losses) on strategic investments, net$(277)$(239)$1,211 Unrealized gains and losses recognized on privately held equity securities, net includes upward and downward adjustments from equity securities accounted for under the measurement alternative, as well as gains and losses from private equity securities in other measurement categories. For privately held securities accounted for under the measurement alternative, the Company recorded upward adjustments of $125 million and $220 million and impairments and downward adjustments of $465 million and $466 million for fiscal 2024 and 2023, respectively.Realized gains on sales of securities, net reflects the difference between the sale proceeds and the carrying value of the security at the beginning of the period or the purchase date, if later. 4. Fair Value MeasurementThe Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:Level 1.    Quoted prices (unadjusted) in active markets for identical assets or liabilities.Level 2.    Significant other inputs that are directly or indirectly observable in the marketplace.Level 3.    Significant unobservable inputs which are supported by little or no market activity.All of the Company’s cash equivalents, marketable securities and foreign currency derivative contracts are classified within Level 1 or Level 2 because the Company’s cash equivalents, marketable securities and foreign currency derivative contracts are valued using quoted market prices or alternative pricing sources and models utilizing observable market inputs. 77Table of ContentsThe following table presents information about the Company’s assets that were measured at fair value as of January 31, 2024 and indicates the fair value hierarchy of the valuation (in millions):DescriptionQuoted Prices inActive Marketsfor Identical Assets(Level 1)Significant OtherObservableInputs(Level 2)SignificantUnobservableInputs(Level 3)Fair ValueCash equivalents (1):Time deposits$0 $1,337 $0 $1,337 Money market mutual funds4,447 0 0 4,447 Cash equivalent securities 0 493 0 493 Marketable securities:Corporate notes and obligations0 2,978 0 2,978 U.S. treasury securities0 575 0 575 Mortgage-backed obligations0 236 0 236 Asset-backed securities0 1,379 0 1,379 Municipal securities0 136 0 136 Commercial paper0 213 0 213 Covered bonds0 78 0 78 Other0 127 0 127 Strategic investments:Equity securities80 0 0 80 Total assets$4,527 $7,552 $0 $12,079 (1) Included in “cash and cash equivalents” in the accompanying consolidated balance sheets in addition to $2.2 billion of cash, as of January 31, 2024.The following table presents information about the Company’s assets that were measured at fair value as of January 31, 2023 and indicates the fair value hierarchy of the valuation (in millions):DescriptionQuoted Prices inActive Marketsfor Identical Assets(Level 1)Significant OtherObservable Inputs (Level 2)SignificantUnobservableInputs(Level 3)Fair ValueCash equivalents (1):Time deposits$0 $1,877 $0 $1,877 Money market mutual funds1,795 0 0 1,795 Cash equivalent securities0 794 0 794 Marketable securities:Corporate notes and obligations0 3,354 0 3,354 U.S. treasury securities0 370 0 370 Mortgage-backed obligations0 178 0 178 Asset-backed securities0 985 0 985 Municipal securities0 169 0 169 Commercial paper0 278 0 278 Covered bonds0 101 0 101 Other0 57 0 57 Strategic investments:Equity securities48 0 0 48 Total assets$1,843 $8,163 $0 $10,006 (1) Included in “cash and cash equivalents” in the accompanying consolidated balance sheets in addition to $2.6 billion of cash, as of January 31, 2023.78Table of ContentsStrategic Investments Measured and Recorded at Fair Value on a Non-Recurring BasisSubstantially all of the Company's privately held debt and equity securities and other investments are recorded at fair value on a non-recurring basis. The estimation of fair value for these investments requires the use of significant unobservable inputs, and as a result, the Company deems these assets as Level 3 within the fair value measurement framework. For privately held equity investments without a readily determinable fair value, the Company applies valuation methods based on information available, including the market approach and option pricing models (“OPM”). Observable transactions, such as the issuance of new equity by an investee, are indicators of investee enterprise value and are used to estimate the fair value of the privately held equity investments. An OPM may be utilized to allocate value to the various classes of securities of the investee, including classes owned by the Company. Such information, available to the Company from investee companies, is supplemented with estimates such as volatility, expected time to liquidity and the rights and obligations of the securities the Company holds. When indicators of impairment are observed for privately held equity securities, the Company generally uses the market approach to estimate the fair value of its investment, giving consideration to the latest observable transactions, as well as the investee's current and projected financial performance and other significant inputs and assumptions, including estimated time to exit, selection and analysis of guideline public companies and the rights and obligations of the securities the Company holds. The Company's privately held debt and equity securities and other investments amounted to $4.8 billion and $4.6 billion as of January 31, 2024 and January 31, 2023, respectively.5. Property and Equipment, Net and Other Balance Sheet AccountsProperty and EquipmentProperty and equipment, net consisted of the following (in millions): As of January 31, 20242023Land $293 $293 Buildings and building improvements 490 489 Computers, equipment and software4,209 3,556 Furniture and fixtures245 259 Leasehold improvements1,604 1,807 Property and equipment, gross6,841 6,404 Less accumulated depreciation and amortization(3,152)(2,702)Property and equipment, net$3,689 $3,702 Depreciation and amortization expense totaled $1.1 billion, $903 million and $678 million during fiscal 2024, 2023 and 2022, respectively.Other Balance Sheet AccountsAccounts payable, accrued expenses and other liabilities as of January 31, 2024 included approximately $2.5 billion of accrued compensation as compared to $2.6 billion as of January 31, 2023.6. Leases and Other CommitmentsLeasesThe Company has operating leases for corporate offices, data centers and equipment under noncancellable operating and finance leases with various expiration dates. The leases have noncancellable remaining terms of 1 year to 16 years, some of which include options to extend for up to 5 years, and some of which include options to terminate within 1 year. 79Table of ContentsThe components of lease expense were as follows (in millions):Fiscal Year Ended January 31,20242023Operating lease cost$1,041 $986 Finance lease cost: Amortization of right-of-use assets $264 $198 Interest on lease liabilities 29 10 Total finance lease cost$293 $208 Supplemental cash flow information related to operating and finance leases was as follows (in millions):Fiscal Year Ended January 31,20242023Cash paid for amounts included in the measurement of lease liabilities:Operating cash outflows for operating leases$716 $769 Operating cash outflows for finance leases 29 10Financing cash outflows for finance leases347 180Right-of-use assets obtained in exchange for lease obligations:Operating leases456 915Supplemental balance sheet information related to operating and finance leases was as follows (in millions):As of January 31,20242023Operating leases:Operating lease right-of-use assets$2,366 $2,890 Operating lease liabilities, current$518 $590 Noncurrent operating lease liabilities2,644 2,897 Total operating lease liabilities$3,162 $3,487 Finance leases:Computers, equipment and software$1,579 $1,053 Accumulated depreciation(525)(264)Property and equipment, net$1,054 $789 Accrued expenses and other liabilities $372 $257 Other noncurrent liabilities 602 534 Total finance lease liabilities$974 $791 Other information related to leases was as follows:As of January 31,20242023Weighted average remaining lease termOperating leases7 years7 yearsFinance leases3 years3 yearsWeighted average discount rateOperating leases2.9 %2.6 %Finance leases3.3 %2.1 %80Table of ContentsAs of January 31, 2024, the maturities of lease liabilities under noncancellable operating and finance leases were as follows (in millions):Operating Leases Finance LeasesFiscal Period:Fiscal 2025$598 $397 Fiscal 2026587 342 Fiscal 2027521 230 Fiscal 2028458 52 Fiscal 2029380 7 Thereafter1,025 0 Total minimum lease payments3,569 1,028 Less: Imputed interest(407)(54)Total$3,162 $974 Operating lease amounts above do not include sublease income. The Company has entered into various sublease agreements with third parties. Under these agreements, the Company expects to receive sublease income of approximately $275 million in the next five years and $18 million thereafter. Of the total lease commitment balance, including leases not yet commenced, of $4.7 billion, approximately $3.6 billion is related to facilities space. The remaining commitment amount is primarily related to equipment.7. Business CombinationsFiscal Year 2023Traction Sales and Marketing Inc.In April 2022, the Company acquired all outstanding stock of Traction Sales and Marketing Inc. ("Traction on Demand”), a professional services firm that provides innovative and critical solutions to clients using the Company’s service offerings and other advanced cloud technologies. The acquisition date fair value of the consideration transferred for Traction on Demand was approximately $340 million, which consisted primarily of $302 million in cash. The Company recorded approximately $62 million for customer relationships with estimated useful lives of five years. The Company recorded approximately $293 million of goodwill which is primarily attributed to the assembled workforce. For the goodwill balance, there is some basis for foreign income tax purposes but no basis for U.S. income tax purposes. Fiscal Year 2022Slack Technologies, Inc.On July 21, 2021, the Company acquired all outstanding stock of Slack Technologies, Inc. (“Slack”), a leading channel-based messaging platform.  The acquisition date fair value of the consideration transferred for Slack was approximately $27.1 billion, which consisted of $15.8 billion of cash paid, $11.1 billion of common stock issued, and $205 million related to the fair value of stock options, restricted stock units and restricted stock awards assumed. The Company recorded $6.4 billion of intangible assets related to customer relationship, developed technology and other purchased intangible assets with useful life of five to eight years. Developed technology represents the preliminary estimated fair value of Slack's data analysis technologies. Customer relationships represent the preliminary estimated fair values of the underlying relationships with Slack customers. The Company recorded $21.4 billion of goodwill which is primarily attributed to the assembled workforce and expanded market opportunities, including integrating the Slack product offering with existing Company service offerings in a digital-first, work anywhere world for which there is no basis for U.S. income tax purposes. The Company assumed unvested stock options, restricted stock units and restricted stock awards with an estimated fair value of $1.7 billion. Of the total consideration, $205 million was allocated to the purchase consideration and $1.5 billion was allocated to future services and will be expensed over the remaining service periods on a straight-line basis.Acumen Solutions, Inc.In February 2021, the Company acquired all outstanding stock of Acumen Solutions, Inc. (“Acumen”), a professional services firm that provides innovative and critical solutions to clients using the Company’s service offerings and other advanced cloud technologies. The acquisition date fair value of the consideration transferred for Acumen was approximately $433 million, in cash. 81Table of Contents8. Intangible Assets Acquired Through Business Combinations and GoodwillIntangible Assets Acquired Through Business CombinationsIntangible assets acquired through business combinations were as follows (in millions):Intangible Assets, GrossAccumulated AmortizationIntangible Assets, NetWeightedAverageRemaining Useful Life (Years) January 31, 2023Additions and retirements, net (1)January 31, 2024January 31, 2023Expense and retirements, net (1)January 31, 2024January 31, 2023January 31, 2024January 31, 2024Acquired developed technology$4,844 $(220)$4,624 $(2,471)$(737)$(3,208)$2,373 $1,416 2.2Customer relationships6,691 (17)6,674 (2,162)(823)(2,985)4,529 3,689 4.8Other (2)303 0 303 (80)(50)(130)223 173 3.5Total$11,838 $(237)$11,601 $(4,713)$(1,610)$(6,323)$7,125 $5,278 4.0(1) The Company retired $261 million of fully depreciated intangible assets during fiscal 2024, of which $244 million were included in acquired developed technology, and $17 million in customer relationships. (2) Included in Other are in-place leases, trade names, trademarks and territory rights. Amortization of intangible assets resulting from business combinations for fiscal 2024, 2023 and 2022 was $1.9 billion, $2.0 billion and  $1.6 billion, respectively.The expected future amortization expense for intangible assets as of January 31, 2024 was as follows (in millions):Fiscal Period:Fiscal 2025$1,605 Fiscal 20261,363 Fiscal 2027996 Fiscal 2028619 Fiscal 2029486 Thereafter209 Total amortization expense$5,278 GoodwillGoodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. The changes in the carrying amounts of goodwill, which is generally not deductible for tax purposes, were as follows (in millions):Balance at January 31, 2022$47,937 Traction on Demand293 Other acquisitions and adjustments (1)338 Balance as of January 31, 2023$48,568 Acquisitions and adjustments (2)52 Balance as of January 31, 2024$48,620 (1) Other acquisitions and adjustments include measurement period adjustments for business combinations from the prior year, including approximately $249 million in fiscal 2023 related to the Company’s July 2021 acquisition of Slack and the effect of foreign currency translation.(2) Acquisitions and adjustments includes the effect of foreign currency translation.82Table of Contents9. DebtThe components of the Company's borrowings were as follows (in millions):InstrumentDate of IssuanceMaturity DateContractual Interest RateOutstanding Principal as of January 31, 2024Carrying Value as of January 31, 2024Carrying Value as of January 31, 20232023 Senior Notes (1) April 2018April 20233.25 %$0 $0 $1,000 Loan assumed on 50 Fremont (2) February 2015June 20233.75 0 0 182 2024 Senior NotesJuly 2021July 20240.625 1,000 999 998 2028 Senior NotesApril 2018April 20283.70 1,500 1,495 1,493 2028 Senior Sustainability NotesJuly 2021July 20281.50 1,000 994 992 2031 Senior NotesJuly 2021July 20311.95 1,500 1,490 1,489 2041 Senior NotesJuly 2021July 20412.70 1,250 1,235 1,235 2051 Senior NotesJuly 2021July 20512.90 2,000 1,978 1,977 2061 Senior NotesJuly 2021July 20613.05 1,250 1,235 1,235 Total carrying value of debt$9,500 9,426 10,601 Less current portion of debt(999)(1,182)Total noncurrent debt$8,427 $9,419 (1) The Company repaid in full the 2023 Senior Notes in the first quarter of fiscal 2024.(2) The Company repaid in full the Loan assumed on 50 Fremont in the second quarter of fiscal 2024.The Company was in compliance with all debt covenants as of January 31, 2024.The total estimated fair value of the Company's outstanding senior unsecured notes (the “Senior Notes”) above was $7.8 billion and $8.8 billion as of January 31, 2024 and January 31, 2023, respectively. The fair value was determined based on the closing trading price per $100 of the Senior Notes as of the last day of trading of the fourth quarter of fiscal 2024 and the last day of trading of fiscal 2023, respectively, and are deemed Level 2 liabilities within the fair value measurement framework.The contractual future principal payments for all borrowings as of January 31, 2024 were as follows (in millions):Fiscal Period:Fiscal 2025$1,000 Fiscal 20260 Fiscal 20270 Fiscal 20280 Fiscal 20292,500 Thereafter6,000 Total principal outstanding$9,500 Revolving Credit FacilityIn December 2020, the Company entered into a Credit Agreement with Citibank, N.A., as administrative agent, and certain other institutional lenders (the “Revolving Loan Credit Agreement”) that provides for a $3.0 billion unsecured revolving credit facility (“Credit Facility”) and matures in December 2025. The Company may use the proceeds of future borrowings under the Credit Facility for general corporate purposes, which may include, without limitation, the consideration, fees, costs and expenses related to any acquisition. The Company amended the Revolving Loan Credit Agreement in April 2022 and May 2023, in each case to reflect certain administrative changes.There were no outstanding borrowings under the Credit Facility as of January 31, 2024. 10. RestructuringIn January 2023, the Company announced a restructuring plan (the “Restructuring Plan”) intended to reduce operating costs, improve operating margins and continue advancing the Company’s ongoing commitment to profitable growth. This plan included a reduction of the Company’s workforce and select real estate exits and office space reductions within certain markets. The actions associated with the employee restructuring under the Restructuring Plan were substantially completed in fiscal 2024 and the actions associated with the real estate portion of the Restructuring Plan are expected to be fully complete in fiscal 2026. 83Table of ContentsIn the fourth quarter of fiscal 2024, the Company initiated, and has substantially completed, an initiative to drive further operational efficiencies through a focused workforce reduction.The following table summarizes the activities related to the Company’s restructuring initiatives for fiscal 2024 and fiscal 2023 (in millions):Fiscal Year Ended January 31, 2024Fiscal Year Ended January 31, 2023Workforce ReductionOffice Space ReductionsTotalWorkforce ReductionOffice Space ReductionsTotalLiability, beginning of the period$607 $0 $607 $0 $0 $0 Charges541 447 988 683 145 828 Payments(1,003)(27)(1,030)(48)(25)(73)Non-cash items(27)(418)(445)(28)(120)(148)Liability, end of the period$118 $2 $120 $607 $0 $607 The liability for restructuring charges, which is related to workforce and office space reductions, is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets. The charges reflected in the table above related to workforce reduction included charges for employee transition, severance payments, employee benefits and share-based compensation. The charges reflected in the table above related to office space reductions included exit charges associated with those reductions. 11. Stockholders’ EquityThe Company maintains the following stock plans: the ESPP, the 2013 Equity Incentive Plan and the 2014 Inducement Equity Incentive Plan (“2014 Inducement Plan”). Options issued have terms of seven years.The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions and fair value per share: Fiscal Year Ended January 31,202420232022Volatility35 - 40%34 - 40%34 - 37%Estimated life3.5 years3.5 years3.5 yearsRisk-free interest rate3.6 - 4.3%1.7 - 4.4%0.4 - 1.7%Weighted-average fair value per share of grants$66.95 $62.10 $59.34 The Company estimated its future stock price volatility considering both its observed option-implied volatilities and its historical volatility calculations. Management believes this is the best estimate of the expected volatility over the expected life of its stock options and stock purchase rights.The estimated life for the stock options was based on an analysis of historical exercise activity. The risk-free interest rate is based on the rate for a U.S. government security with the same estimated life at the time of the option grant and the stock purchase rights.The estimated forfeiture rate applied is based on historical forfeiture rates. 84Table of ContentsStock option activity for fiscal 2024 was as follows:  Options Outstanding SharesAvailable forGrant(in millions)OutstandingStockOptions(in millions)Weighted-AverageExercise PriceAggregateIntrinsic Value (in millions)Balance as of January 31, 202373 23 $175.23 Increase in shares authorized:2013 Equity Incentive Plan10 Restricted stock activity(25)Exercised0 (9)152.71 Plan shares expired or canceled2 (2)203.25 Balance as of January 31, 202460 12 $185.77 $1,252 Vested or expected to vest12 $185.00 $1,218 Exercisable as of January 31, 20248 $172.82 $882 The total intrinsic value of the options exercised during fiscal 2024, 2023 and 2022, was $0.6 billion, $0.2 billion, and $1.2 billion, respectively. The intrinsic value of options exercised during each year is calculated as the difference between the market value of the stock at the time of exercise and the exercise price of the stock option. The weighted-average remaining contractual life of vested and expected to vest options is approximately 3.9 years. As of January 31, 2024, options to purchase 8 million shares were vested at a weighted-average exercise price of $172.82 per share and had a weighted-average remaining contractual life of approximately 3.4 years. The total intrinsic value of these vested options based on the market value of the stock as of January 31, 2024 was approximately $0.9 billion.  Options OutstandingOptions ExercisableRange of ExercisePricesNumberOutstanding(in millions)Weighted-AverageRemainingContractual Life(Years)Weighted-AverageExercisePriceNumber ofShares(in millions)Weighted-AverageExercisePrice$1.34 to $150.152 2.6$99.16 2 $94.06 $151.25 to $160.172 3.5154.77 2 154.35 $161.50 to $186.512 3.5166.95 1 162.75 $191.31 to $215.172 4.1213.84 1 213.72 $218.213 5.0218.21 1 218.21 $218.63 to $296.841 4.4243.76 1 239.59 12 4.0$185.77 8 $172.82 Restricted stock activity for fiscal 2024 was as follows: Restricted Stock Outstanding Outstanding(in millions)Weighted-Average Grant Date Fair ValueAggregateIntrinsicValue (in millions)Balance as of January 31, 202329 $204.62 Granted - restricted stock units and awards14 199.85 Granted - performance-based stock units1 195.67 Canceled(5)201.86 Vested and converted to shares(11)202.62 Balance as of January 31, 202428 $202.95 $7,738 Expected to vest24 $6,706 Restricted stock, which upon vesting entitles the holder to one share of common stock for each share of restricted stock, has an exercise price of $0.001 per share, which is equal to the par value of the Company’s common stock, and generally vests over four years. The total fair value of shares vested during fiscal 2024 and 2023 was $2.5 billion and $2.1 billion, respectively.85Table of ContentsIn fiscal 2024, 2023 and 2022, the Company granted performance-based restricted stock unit awards to executive officers and other members of senior management. The performance-based restricted stock unit awards are subject to vesting based on the achievement of a market-based condition or a performance-based condition and a service-based condition. At the end of the service periods, which range from approximately one-year to four-years, these performance-based restricted stock units will vest in a percentage of the target number of shares between 0 and 200 percent, depending on the extent the market-based condition or performance-based condition, or both, is achieved.The aggregate expected stock-based compensation expense remaining to be recognized as of January 31, 2024 was as follows (in millions):Fiscal Period:Fiscal 2025$2,497 Fiscal 20261,664 Fiscal 2027868 Fiscal 2028227 Total stock-based compensation expense$5,256 The aggregate expected stock-based compensation expense remaining to be recognized reflects only outstanding stock awards as of January 31, 2024 and assumes no forfeiture activity and no changes in the expected level of attainment of performance share grants based on the Company’s financial performance relative to certain targets.Common StockThe following number of shares of common stock were reserved and available for future issuance at January 31, 2024 (in millions):Options outstanding12 Restricted stock awards and units and performance-based stock units outstanding28 Stock available for future grant or issuance:2013 Equity Incentive Plan60 2014 Inducement Plan1 Amended and Restated 2004 Employee Stock Purchase Plan17 118 Preferred StockThe Company’s board of directors has the authority, without further action by stockholders, to issue up to 5,000,000 shares of preferred stock in one or more series. The Company’s board of directors may designate the rights, preferences, privileges and restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms and number of shares constituting any series or the designation of any series. The issuance of preferred stock could have the effect of restricting dividends on the Company’s common stock, diluting the voting power of its common stock, impairing the liquidation rights of its common stock, or delaying or preventing a change in control. As of January 31, 2024 and 2023, no shares of preferred stock were outstanding.Share Repurchase ProgramIn August 2022, the Board of Directors authorized a program to repurchase up to $10.0 billion of the Company’s common stock (the “Share Repurchase Program”). In February 2023, the Board of Directors authorized an additional $10.0 billion in repurchases under the Share Repurchase Program, for an aggregate total authorized of $20.0 billion. The Share Repurchase Program does not have a fixed expiration date and does not obligate the Company to acquire any specific number of shares. Under the Share Repurchase Program, shares of common stock may be repurchased using a variety of methods, including privately negotiated and or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as part of accelerated share repurchases and other methods. The timing, manner, price and amount of any repurchases are determined by the Company in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions. The Company accounts for treasury stock under the cost method.86Table of ContentsDuring fiscal year ended January 31, 2024 and 2023, the Company repurchased approximately 36 million and 28 million shares of its common stock for approximately $7.7 billion and $4.0 billion, at an average price per share of $210.30 and $144.94, respectively. All repurchases were made in open market transactions. As of January 31, 2024, the Company was authorized to purchase a remaining $8.3 billion of its common stock under the Share Repurchase Program. In February 2024, the Board of Directors authorized an additional $10.0 billion in repurchases under the Share Repurchase Program for an aggregate total authorization of $30.0 billion.12. Income TaxesThe domestic and foreign components of income before provision for (benefit from) income taxes consisted of the following (in millions): Fiscal Year Ended January 31, 202420232022Domestic$4,045 $398 $1,338 Foreign905 262 194 $4,950 $660 $1,532 The provision for (benefit from) income taxes consisted of the following (in millions): Fiscal Year Ended January 31, 202420232022Current:Federal$940 $173 $6 State199 216 (16)Foreign417 397 352 Total1,556 786 342 Deferred:Federal(640)(134)(181)State(182)(203)(57)Foreign80 3 (16)Total(742)(334)(254)Provision for (benefit from) income taxes$814 $452 $88 A reconciliation of income taxes at the statutory federal income tax rate to the provision for (benefit from) income taxes included in the accompanying consolidated statements of operations is as follows (in millions): Fiscal Year Ended January 31, 202420232022U.S. federal taxes at statutory rate$1,040 $139 $322 State, net of the federal benefit19 29 (29)Effects of non-U.S. operations (1)29 287 199 Tax credits(332)(239)(263)Non-deductible expenses43 94 83 Foreign-derived intangible income deduction(56)(55)0 (Windfall)/shortfall related to share-based compensation(36)31 (323)Change in valuation allowance 101 171 101 Other, net6 (5)(2)Provision for (benefit from) income taxes$814 $452 $88 (1) Fiscal 2024 Effects of non-U.S. operations included tax benefits from foreign tax credits attributable to recent IRS notices.Deferred Income TaxesDeferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.87Table of ContentsSignificant components of the Company’s deferred tax assets and liabilities were as follows (in millions): As of January 31, 20242023Deferred tax assets:Losses and deductions carryforward$176 $268 Deferred stock-based compensation expense219 312 Tax credits760 1,055 Accrued liabilities419 470 Intangible assets1,899 1,976 Lease liabilities818 912 Unearned revenue37 78 Capitalized research & development1,710 914 Other81 86 Total deferred tax assets6,119 6,071 Less valuation allowance(733)(633)Deferred tax assets, net of valuation allowance5,386 5,438 Deferred tax liabilities:Capitalized costs to obtain revenue contracts(873)(913)Purchased intangible assets(1,030)(1,500)Depreciation and amortization(263)(304)Basis difference on strategic and other investments(181)(250)Lease right-of-use assets(636)(767)Total deferred tax liabilities(2,983)(3,734)Net deferred tax assets (liabilities)$2,403 $1,704 At January 31, 2024, for federal income tax purposes, the Company had net operating loss carryforwards of approximately $168 million, which expire in fiscal 2025 and through fiscal 2038 with the exception of post-2017 losses that do not expire, federal research and development tax credits of approximately $259 million, which expire in fiscal 2037 through fiscal 2044, foreign tax credits of approximately $164 million, which expire in fiscal 2029 through fiscal 2034. For California income tax purposes, the Company had net operating loss carryforwards of approximately $639 million which expire beginning in fiscal 2029 through fiscal 2043, California research and development tax credits of approximately $834 million, which do not expire. For other states' income tax purposes, the Company had tax credits of approximately $98 million, which expire beginning in fiscal 2030 through fiscal 2042, and insignificant net operating loss carryforwards. Utilization of the Company’s net operating loss carryforwards may be subject to substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration of the net operating loss and tax credit carryforwards before utilization.The Company had a valuation allowance of $733 million and $633 million as of January 31, 2024 and January 31, 2023 respectively. The Company regularly assesses the realizability of its deferred tax assets and establishes a valuation allowance if it is more-likely-than-not that some or all of its deferred tax assets will not be realized. The Company evaluates and weighs all available positive and negative evidence such as historic results, future reversals of existing deferred tax liabilities, projected future taxable income, as well as prudent and feasible tax-planning strategies. The assessment requires significant judgment and is performed in each of the applicable jurisdictions. The increase in the valuation allowance during fiscal 2024 was primarily due to state tax credits and certain U.S foreign tax credits that are not expected to be realized.  At the end of January 31, 2024, the valuation allowance was primarily related to U.S. states’ net operating loss and tax credits and certain U.S foreign tax credits. The Company will continue to evaluate the need for valuation allowances for its deferred tax assets.Unrecognized Tax Benefits and Other ConsiderationsThe Company records liabilities related to its uncertain tax positions. Tax positions for the Company and its subsidiaries are subject to income tax audits by multiple tax jurisdictions throughout the world. The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority, based on the technical merits. The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority. 88Table of ContentsA reconciliation of the beginning and ending balance of total unrecognized tax benefits for fiscal years 2024, 2023 and 2022 is as follows (in millions): Fiscal Year Ended January 31, 202420232022Beginning of period$1,975 $1,822 $1,479 Tax positions taken in prior period:Gross increases53 53 25 Gross decreases(85)(45)(27)Tax positions taken in current period:Gross increases287 227 358 Settlements(21)(40)0 Lapse of statute of limitations(104)(12)(7)Currency translation effect(22)(30)(6)End of period$2,083 $1,975 $1,822 In fiscal 2024, 2023 and 2022, the Company reported a net increase of approximately $108 million, $153 million, and $343 million, respectively in its unrecognized tax benefits. For fiscal 2024, 2023 and 2022, total unrecognized tax benefits in an amount of $1.7 billion, $1.5 billion and $1.3 billion, respectively, if recognized, would have reduced income tax expense and the Company’s effective tax rate.The Company has recognized interest and penalties related to unrecognized tax benefits in the income tax provision of $29 million, $48 million and $21 million in fiscal 2024, 2023 and 2022, respectively. Interest and penalties accrued as of January 31, 2024, 2023 and 2022, were $136 million, $107 million and $58 million, respectively. Certain prior year tax returns are currently being examined by various taxing authorities in major tax jurisdictions including the United States, France and Israel. The Company currently considers U.S. federal, Japan, Australia, Germany, France, United Kingdom, Ireland and Israel to be major tax jurisdictions. The Company’s U.S. federal tax returns since fiscal 2008 remain open to examination, and non-U.S. tax returns generally remain open to examination since fiscal 2018. The Company believes that it has provided adequate reserves for its income tax uncertainties in all open tax years. As the outcome of the tax audits cannot be predicted with certainty, if any issues addressed in the Company's tax audits are resolved in a manner inconsistent with management's expectations, the Company could adjust its provision for income taxes in the future.The Company anticipates it is reasonably possible that an inconsequential decrease of its unrecognized tax benefits may occur in the next 12 months, as the applicable statutes of limitations lapse, ongoing examinations are completed, or tax positions meet the conditions of being effectively settled.13. Net Income Per ShareBasic earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding for the fiscal period. Diluted earnings per share is computed by giving effect to all potential weighted average dilutive common stock, including options and restricted stock units. The dilutive effect of outstanding awards is reflected in diluted earnings per share by application of the treasury stock method.A reconciliation of the denominator used in the calculation of basic and diluted earnings per share is as follows (in millions):4Fiscal Year Ended January 31, 202420232022Numerator:Net income$4,136 $208 $1,444 Denominator:Weighted-average shares outstanding for basic earnings per share974 992 955 Effect of dilutive securities:Employee stock awards10 5 19 Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share984 997 974 The weighted-average number of shares outstanding used in the computation of diluted earnings per share does not include the effect of the following potentially outstanding common stock. The effects of these potentially outstanding shares 89Table of Contentswere not included in the calculation of diluted earnings per share because the effect would have been anti-dilutive (in millions): Fiscal Year Ended January 31, 202420232022Employee stock awards13 39 4 14. Legal Proceedings and ClaimsIn the ordinary course of business, the Company is or may be involved in various legal or regulatory proceedings, claims or purported class actions related to alleged infringement of third-party patents and other intellectual property rights, commercial, corporate and securities, labor and employment, wage and hour and other claims. The Company has been, and may in the future be, put on notice or sued by third parties for alleged infringement of their proprietary rights, including patent infringement. In general, the resolution of a legal matter could prevent the Company from offering its service to others, could be material to the Company’s financial condition or cash flows, or both, or could otherwise adversely affect the Company’s reputation and future operating results.The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. The outcomes of legal proceedings and other contingencies are, however, inherently unpredictable and subject to significant uncertainties. At this time, the Company is not able to reasonably estimate the amount or range of possible losses in excess of any amounts accrued, including losses that could arise as a result of application of non-monetary remedies, with respect to the contingencies it faces, and the Company’s estimates may not prove to be accurate. In management’s opinion, resolution of all current matters, including those described below, is not expected to have a material adverse impact on the Company’s financial statements. However, depending on the nature and timing of any such dispute, payment or other contingency, the resolution of a matter could materially affect the Company’s current or future results of operations or cash flows, or both, in a particular quarter.Slack LitigationBeginning in September 2019, seven purported class action lawsuits were filed against Slack, its directors, certain of its officers and certain investment funds associated with certain of its directors, each alleging violations of securities laws in connection with Slack’s registration statement on Form S-1 (the “Registration Statement”) filed with the SEC. All but one of these actions were filed in the Superior Court of California for the County of San Mateo, though one plaintiff originally filed in the County of San Francisco before refiling in the County of San Mateo (and the original San Francisco action was dismissed). The remaining action was filed in the U.S. District Court for the Northern District of California (the “Federal Action”). In the Federal Action, captioned Dennee v. Slack Technologies, Inc., Case No. 3:19-CV-05857-SI, Slack and the other defendants filed a motion to dismiss the complaint in January 2020. In April 2020, the court granted in part and denied in part the motion to dismiss. In May 2020, Slack and the other defendants filed a motion to certify the court’s order for interlocutory appeal, which the court granted. Slack and the other defendants filed a petition for permission to appeal the district court’s order to the Ninth Circuit Court of Appeals, which was granted in July 2020. Oral argument was heard in May 2021. On September 20, 2021, the Ninth Circuit affirmed the district court’s ruling. Slack filed a petition for rehearing with the Ninth Circuit on November 3, 2021, which was denied on May 2, 2022. Slack filed a petition for a writ of certiorari with the U.S. Supreme Court on August 31, 2022, which was granted on December 13, 2022. On June 1, 2023, the Supreme Court issued a unanimous decision vacating the Ninth Circuit’s decision and remanded for further proceedings. The Ninth Circuit ordered the parties to submit additional briefing in light of the Supreme Court’s decision. That briefing has concluded, and the parties await rulings from the Ninth Circuit. The state court actions were consolidated in November 2019, and the consolidated action is captioned In re Slack Technologies, Inc. Shareholder Litigation, Lead Case No. 19CIV05370 (the “State Court Action”). An additional state court action was filed in San Mateo County in June 2020 but was consolidated with the State Court Action in July 2020. Slack and the other defendants filed demurrers to the complaint in the State Court Action in February 2020. In August 2020, the court sustained in part and overruled in part the demurrers, and granted plaintiffs leave to file an amended complaint, which they filed in October 2020. Slack and the other defendants answered the complaint in November 2020. Plaintiffs filed a motion for class certification on October 21, 2021, which remains pending. On October 26, 2022, the court stayed the State Court Action pending resolution of Slack’s petition for a writ of certiorari in the Federal Action. The State Court Action remains stayed pending resolution of the appellate proceedings in the Federal Action. The Federal Action and the State Court Action seek unspecified monetary damages and other relief on behalf of investors who purchased Slack’s Class A common stock issued pursuant and/or traceable to the Registration Statement.90Table of Contents15. Subsequent EventsBusiness CombinationIn February 2024, the Company acquired all outstanding stock of Spiff, Inc. ("Spiff”), a software company that provides incentive compensation management solutions. The acquisition date fair value of the consideration transferred for Spiff, inclusive of the Company's previous ownership interest, was approximately $429 million, and consisted primarily of $374 million in cash paid at closing.Dividend DeclarationOn February 28, 2024, the Company announced a cash dividend of $0.40 per share of the Company’s outstanding common stock, payable on April 11, 2024 to stockholders of record as of the close of business on March 14, 2024.91Table of ContentsITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENone.ITEM 9A.     CONTROLS AND PROCEDURES(a) Evaluation of Disclosure Controls and ProceduresUnder the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report.In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.Based on management’s evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are designed to, and are effective to, provide assurance at a reasonable level, that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosures.(b) Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of January 31, 2024 based on the guidelines established in the Internal Control—Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Our internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.Based on the results of our evaluation, our management concluded that our internal control over financial reporting was effective as of January 31, 2024. We reviewed the results of management’s assessment with our Audit Committee.The effectiveness of our internal control over financial reporting as of January 31, 2024 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in its report which is included in Item 8 of this Annual Report on Form 10-K.(c) Changes in Internal Control over Financial ReportingThere was no change in our internal control over financial reporting that occurred during the quarter ended January 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.(d) Inherent Limitations on Effectiveness of ControlsOur management, including our principal executive officer and principal financial officer, do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate 92Table of Contentsbecause of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.ITEM 9B.     OTHER INFORMATIONDuring the three months ended January 31, 2024, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as defined in Item 408 of Regulation S-K), except as follows. On December 29, 2023, Marc Benioff, Chair and Chief Executive Officer, adopted a Rule 10b5-1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 750,000 shares of the Company’s common stock, subject to certain conditions, through June 10, 2024. On December 22, 2023, Brian Millham, President and Chief Operating Officer, adopted a Rule 10b5-1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 532,554 shares of the Company’s common stock, subject to certain conditions, through December 31, 2024. On December 13, 2023, Srinivas Tallapragada, President and Chief Engineering Officer, adopted a Rule 10b5-1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 50,051 shares of the Company’s common stock, subject to certain conditions, through December 31, 2024.ITEM 9C.     DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot applicable.93Table of ContentsPART III.ITEM 10.     DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe information concerning our directors, our Audit Committee and any changes to the process by which stockholders may recommend nominees to the Board required by this Item are incorporated herein by reference to information contained in the Proxy Statement, including “Directors and Corporate Governance” and, as applicable, “Delinquent Section 16(a) Reports.”The information concerning our executive officers required by this Item is incorporated by reference herein to the section of this Annual Report on Form 10-K in Part I, entitled “Information About Our Executive Officers.”We have adopted a code of ethics, our Code of Conduct, which applies to all employees, including our chief executive officer, Marc Benioff, principal financial officer, Amy Weaver, principal accounting officer, Sundeep Reddy and all other executive officers. The Code of Conduct is available on our website at http://investor.salesforce.com/about-us/investor/corporate-governance/. A copy may also be obtained without charge by contacting Investor Relations, Salesforce, Inc., Salesforce Tower, 415 Mission St, 3rd Fl, San Francisco, California 94105 or by calling (415) 901-7000.We plan to post on our website at the address described above future amendments and waivers of our Code of Conduct as required under applicable NYSE and SEC rules.ITEM 11.     EXECUTIVE COMPENSATIONThe information required by this Item is incorporated herein by reference to information contained in the Proxy Statement, including “Compensation Discussion and Analysis,” “Committee Reports,” “Directors and Corporate Governance” and “Executive Compensation and Other Matters.”ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSThe information required by this Item is incorporated herein by reference to information contained in the Proxy Statement, including “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Equity Compensation Plan Information.”ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCEThe information required by this Item is incorporated herein by reference to information contained in the Proxy Statement, including “Directors and Corporate Governance” and “Employment Contracts and Certain Transactions.”ITEM 14.     PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item is incorporated herein by reference to information contained in the Proxy Statement, including “Ratification of Appointment of Independent Auditors.”94Table of ContentsPART IVITEM 15.     EXHIBITS AND FINANCIAL STATEMENT SCHEDULES(a) The following documents are filed as a part of this Annual Report on Form 10-K:1. Financial Statements: The information concerning our financial statements, and Report of Independent Registered Public Accounting Firm required by this Item is incorporated by reference herein to the section of this Annual Report on Form 10-K in Item 8, entitled “Financial Statements.”2. Financial Statement Schedules: The Financial Statement Schedules have been omitted because they are not applicable or are not required or are not present in material amounts or the information required to be set forth herein is included in the Consolidated Financial Statements or Notes thereto.3. Exhibits: See “Index to Exhibits.”(b) Exhibits. The exhibits listed below in the accompanying “Index to Exhibits” are filed or incorporated by reference as part of this Annual Report on Form 10-K.ITEM 16.     10-K SUMMARYOmitted at registrant’s option.Index to ExhibitsExhibitNo.ProvidedHerewithIncorporated by ReferenceExhibit DescriptionFormSEC File No.ExhibitFiling Date3.1Restated Certificate of Incorporation of Salesforce, Inc.8-K001-322243.14/4/20223.2Amended and Restated Bylaws of Salesforce, Inc.8-K001-322243.112/16/20224.1Specimen Common Stock Certificate10-Q001-322244.16/1/20224.2Indenture, dated April 11, 2018, between the Registrant and U.S. Bank National Association, as trustee8-K001-322244.14/11/20184.3First Supplemental Indenture, dated April 11, 2018, between the Registrant and U.S. Bank National Association, as trustee (including Forms of 2023 and 2028 Notes)8-K001-322244.24/11/20184.4Second Supplemental Indenture, dated July 12, 2021, between the Registrant and U.S. Bank National Association, as trustee (including Forms of the 2024, 2031, 2041, 2051, 2061 and Sustainability Notes)8-K001-322244.27/12/20214.5Indenture, dated April 9, 2020, between Slack Technologies, Inc. and U.S. Bank National Association, as trustee8-K001-322244.17/21/20214.6First Supplemental Indenture, dated as of February 10, 2021, between Slack Technologies, Inc. and U.S. Bank National Association, as trustee8-K001-322244.27/21/20214.7Second Supplemental Indenture, dated July 21, 2021, by and among Slack Technologies, Inc., the Registrant, Skyline Strategies II LLC and U.S. Bank National Association, as trustee8-K001-322244.37/21/20214.8Description of the Registrant’s Capital Stock10-K001-322244.83/8/202310.1*Salesforce, Inc. Amended and Restated 2013 Equity Incentive PlanS-8333-2725994.36/12/202395Table of ContentsExhibitNo.ProvidedHerewithIncorporated by ReferenceExhibit DescriptionFormSEC File No.ExhibitFiling Date10.2*Salesforce, Inc. Amended and Restated 2004 Employee Stock Purchase PlanS-8333-2655554.46/13/202210.3*Form of Indemnification Agreement between the Registrant and its officers and directorsS-1/A333-11128910.14/20/200410.4*MetaMind, Inc. 2014 Stock Incentive PlanS-8333-2115104.15/20/201610.5*2014 Amended and Restated Inducement Equity Incentive Plan10-Q001-3222410.36/1/202210.6*Related forms of equity agreements under the Amended and Restated 2013 Equity Incentive Plan10-Q001-3222410.46/1/202210.7*Related forms of equity agreements under the Amended and Restated 2004 Employee Stock Purchase Plan10-Q001-3222410.56/1/202210.8*Related forms of equity agreements under the Amended and Restated 2014 Inducement Equity Incentive Plan10-Q001-3222410.66/1/202210.9*Amended and Restated Gratitude Bonus Plan10-Q001-3222410.76/1/202210.10*Traction Sales and Marketing Inc. Equity Incentive PlanS-8333-2655574.36/13/202210.11*Form of Performance-Based Restricted Stock Unit Agreement10-Q001-3222410.16/1/202310.12*Form of Change of Control and Retention Agreement as entered into with Marc Benioff10-K001-3222410.133/9/200910.13*Form of Change of Control and Retention Agreement as entered into with Parker Harris  10-K 001-32224 10.14 3/9/200910.14*Form of Change of Control and Retention Agreement entered into with non-CEO Executive Officers after 201410-K001-3222410.163/5/202010.15*Retention Agreement, dated February 10, 2021, between the Registrant and Brian Millham10-Q001-3222410.26/1/202310.16*Aircraft Time Sharing Agreement, dated March 17, 2020, between the Registrant and Marc Benioff10-K001-3222410.173/17/202110.17*Non-Employee Director Compensation Program and related form of Director RSU AgreementX10.18Office Lease, dated April 10, 2014, between the Registrant and Transbay Tower LLC10-Q001-3222410.25/30/201410.19Purchase and Sale Agreement, dated November 10, 2014, between the Registrant and 50 Fremont Tower, LLC10-Q001-3222410.211/26/201410.20Credit Agreement, dated as of December 23, 2020, by and among the Registrant, the lenders and other parties party thereto, and Citibank, N.A., as Administrative Agent, Swingline Lender and an Issuing Lender, as amended by Amendment No. 1, dated as of April 4, 2022, and Amendment No. 2, dated as of May 8, 2023.10-Q001-3222410.36/1/202396Table of ContentsExhibitNo.ProvidedHerewithIncorporated by ReferenceExhibit DescriptionFormSEC File No.ExhibitFiling Date10.21Credit Agreement, dated as of December 23, 2020, by and among the Registrant, the lenders and other parties party thereto, and Bank of America, N.A., as Administrative Agent.8-K001-3222410.212/23/202010.22Nomination and Cooperation Agreement between Salesforce, Inc. and ValueAct Capital Management L.P., dated January 27, 20238-K001-3222499.11/27/202321.1List of SubsidiariesX23.1Consent of Independent Registered Public Accounting FirmX24.1Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10-K)X31.1Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002X31.2Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002X32.1Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002X97.01Executive Officer Incentive Compensation Recovery PolicyX101.INSInline XBRL Instance Document101.SCHInline XBRL Taxonomy Extension Schema Document101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document101.DEFInline XBRL Extension Definition101.LABInline XBRL Taxonomy Extension Label Linkbase Document101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document104The Cover Page Interactive Data File, formatted in Inline XBRL (included in Exhibit 101)*Indicates a management contract or compensatory plan or arrangement.97Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: March 6, 2024    Salesforce, Inc.  By: /s/ AMY WEAVER   Amy WeaverPresident andChief Financial Officer(Principal Financial Officer)Dated: March 6, 2024    Salesforce, Inc.  By: /s/ SUNDEEP REDDY   Sundeep Reddy   Executive Vice President and Chief Accounting Officer (Principal Accounting Officer)98Table of ContentsPOWER OF ATTORNEY AND SIGNATURESKNOW ALL PERSONS BY THESE PRESENT, that each person whose signature appears below constitutes and appoints Marc Benioff, Amy Weaver, Sundeep Reddy and Sabastian Niles, his or her attorney-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.SignatureTitleDate/s/ Marc BenioffChair of the Board and Chief Executive Officer (Principal Executive Officer)March 6, 2024Marc Benioff/s/ Amy WeaverPresident and Chief Financial Officer (Principal Financial Officer)March 6, 2024Amy Weaver/s/ Sundeep ReddyExecutive Vice President and Chief Accounting Officer (Principal Accounting Officer)March 6, 2024Sundeep Reddy/s/ Laura AlberDirectorMarch 6, 2024Laura Alber/s/ Craig ConwayDirectorMarch 6, 2024Craig Conway/s/ Arnold DonaldDirectorMarch 6, 2024Arnold Donald/s/ Parker Harris Director, Co-FounderMarch 6, 2024Parker Harris/s/ Neelie KroesDirectorMarch 6, 2024Neelie Kroes/s/ Sachin MehraDirectorMarch 6, 2024Sachin Mehra/s/ Mason MorfitDirectorMarch 6, 2024Mason Morfit/s/ Oscar MunozDirectorMarch 6, 2024Oscar Munoz/s/ John V. RoosDirectorMarch 6, 2024John V. Roos/s/ Robin L. WashingtonDirectorMarch 6, 2024Robin L. Washington/s/ Maynard WebbDirectorMarch 6, 2024Maynard Webb/s/ Susan WojcickiDirectorMarch 6, 2024Susan Wojcicki99
